Savings Banks Gaining Recognition... Storming Growth in Check Card Business (Comprehensive)

Savings Bank Check Card Sales Up 28% Year-on-Year to 129.9 Billion KRW
Active Members and Card Performance Expand 90% in 2 Years
Effective Marketing and App Revamp Show Strong Results

[Asia Economy Reporter Song Seung-seop] The check card business in the savings bank industry is experiencing rapid growth. This is attributed to increased overall awareness through active marketing, including parking accounts, and the effective provision of non-face-to-face subscription services via mobile applications (apps).

According to the Korea Federation of Savings Banks on the 2nd, the sales amount of eight types of cards handled by the federation last year was 129.9 billion KRW, an increase of 28% (37.6 billion KRW) compared to the previous year. Compared to two years ago, when it was around 89.3 billion KRW, this represents an increase of about 45%.

The number of active members who regularly use the cards is also rapidly expanding. The total reached 273,162, showing a 93% (141,503 people) increase over two years. Compared to the previous year, it also increased by 41%. The number of valid cards, whose validity period has not expired, was 275,358, increasing annually by 36% and 40%, respectively.

Since 2008, the federation has launched card products in partnership with BC Card as part of business diversification. At that time, many small savings banks lacked the capacity to issue check cards, so the Korea Federation of Savings Banks amended the law to allow it to issue and manage debit electronic payment instruments and handle payment settlement tasks, starting as a joint operation. Although various cashback discounts and preferential interest rates were offered, officials explained that performance was minimal due to a lack of differentiation from commercial banks and negative perceptions.

Improvement of Savings Bank Image through Active Marketing and Parking Accounts

The recent improvement in card business indicators is analyzed to be due to the effectiveness of the industry's strategy to increase awareness through active marketing. TV advertising is a representative example. Savings banks were only allowed to broadcast TV ads at specific times and could not include repetitive rhythms and lyrics in hook songs. However, since May last year, regulations were lifted for image advertisements, allowing the Korea Federation of Savings Banks to present TV ads for the first time in over ten years, and Pepper Savings Bank also started TV advertising for the first time since its establishment.

Some savings banks targeted the millennial generation through social network service (SNS) activities. OK Savings Bank, with 350,000 YouTube subscribers, has some content exceeding 1 million views. SBI Savings Bank also had 256 YouTube contents as of last year. By appealing to the 20s and 30s generation through YouTube, they effectively renewed their previously negative corporate image and focused on enhancing brand value.

Interest in parking accounts, which pay interest even if money is deposited for just one day, also contributed. It is analyzed that the inflow into parking accounts naturally led to card subscriptions amid the low-interest rate environment and stock investment boom. According to the Bank of Korea, the deposit amount of savings banks, which was 59.8102 trillion KRW in 2018, grew to 79.1764 trillion KRW in two years. In line with this, the federation designed the ‘SB Wise Check Card’ to be used as a deposit and withdrawal account with Pepper Savings Bank’s parking account.

Impact of Enabling Non-Face-to-Face Subscription through Mobile Platform Improvements

The large-scale improvement of mobile financial platforms by savings banks also seems to have had an impact. As demand for non-face-to-face and digital finance continues to increase, they built systems allowing card product subscriptions non-face-to-face through user-friendly apps.

Sangsangin Savings Bank launched the digital financial platform ‘BangBangBang’ last year, completely revamping its mobile banking service. OK Savings Bank also renovated its mobile platform to improve deposit and loan services. In addition, SBI Savings Bank, JT, Aequon, KB Savings Bank, and others renewed their apps. The federation also launched the mobile app SB TokTok Plus in 2019, enabling non-face-to-face subscription and use of seven out of eight check cards.

A representative from the Korea Federation of Savings Banks said, “Some savings banks are actively conducting promotions linking check cards and deposit accounts,” adding, “As demand continues to increase, we plan to continue the check card business.”

This content was produced with the assistance of AI translation services.