LINE Financial Asia has signed a share subscription agreement to buy 20% interest in Bank KEB Hana Indonesia in a bid to boost its digital banking services in the country.

The deal will provide LINE Financial with the second largest stake in KEB Hana.

LINE Financial Asia expects to leverage Indonesia’s more than 100 million smartphone users to build a potential market for digital banking.

In turn, KEB Hana anticipates benefiting from LINE’s user base, as well as to bolster its low-interest deposit volume, retail banking services and digital marketing capabilities.

LINE and KEB Hana further plan to develop deposit/microcredit products and remittance & payment services for Indonesian customers.

The partners will also work together with local and international credit rating agencies on new projects to enhance credit rating models and create an identity verification process (e-KYC), among others.

LINE Financial Asia CEO In Joon Hwang said: “Through this partnership with PT Bank KEB Hana, we will launch easy-to-use and innovative banking services in Indonesia. This agreement is an important step toward becoming a leader in mobile banking and expanding our fintech services.”

To support the enhanced fintech operations, LINE plans to hire employees across various areas, including business development, service planning and management.

Bank KEB Hana president director Lee Hwa-Soo said: “I believe LINE’s advanced digital technology and KEB Hana Bank’s retail banking experience will prove to be the future of the banking industry, demonstrating a new financial model that begins in Indonesia.”

The acquisition is subject to customary closing conditions and approvals and the new digital banking service is set to launch next year.