Mizuho Financial and the messaging app Line have decided not to start a mobile bank because it would take too much money and time.
The digital bank was first announced in 2018 and was supposed to launch in fiscal 2020. It was made to reach a younger generation of customers by combining Mizuho’s banking experience with Line’s UX skills for millennials.
The joint venture was supposed to be aimed directly at Line’s 94 million users.
But, Nikkei says that the launch was delayed because of problems with technology and efforts to stop money laundering. At the same time, Mizuho had a number of problems with its own systems.
Due to the delay, competitors were able to get a head start. One, Rakuten Bank, quickly got 13 million customers.
The partners now say in a statement:
“Line and Mizuho FG have mutually reached the conclusion that additional time and investment would be required to provide a secure and convenient service that meets customers’ expectations and that at present, this would not be attainable in a timely manner.”
Mizuho owns 66.6% of the JV, and Line owns 33.4%. The JV will now be broken up.
But they will keep working together on the Line personal loan service, which is already up and running.
