The First Budget Phone Service in the Banking Sector, KB Livem: Challenges to Overcome...

Financial and Telecom Benefits Are LivM's Strength
Interview with Yang Wonyong, Head of KB Kookmin Bank Liv Mobile Platform Division

[Asia Economy Reporter Park Sun-mi]"When a bank operates a telecommunications business, its customers have the advantage of receiving benefits simultaneously in both the financial and telecommunications sectors. Customers using KB Kookmin Bank's budget phone service ‘Liiv M’ receive preferential interest rate benefits when subscribing to Kookmin Bank financial products, and conversely, bank customers who subscribe to the budget phone service can receive discounts on telecommunications fees. This is the greatest strength."

Yang Won-yong, Head of the Liiv Mobile Platform Division at KB Kookmin Bank, explained in an interview with Asia Economy on the 12th that the core of the business is that Kookmin Bank, the first bank in the banking sector to operate a telecommunications business, can provide customers with combined benefits in both finance and telecommunications.

Yang said, "Although using a budget phone significantly reduces telecommunications fees, there is a perception that it lacks additional services, so it is not widely used. We can fill that gap with services such as offering preferential interest rates on financial products."

Liiv M was launched in October 2019 as the ‘first’ innovative financial service in Korea under the financial regulatory sandbox. Yang believes that although the budget phone business is still in its early stages, the goal of reaching 1 million Liiv M subscribers is achievable. He said, "Considering that Kookmin Bank has about 24 million customers, the scenario is that the 1 million subscriber target can be reached within 2 to 3 years. The current subscriber count of Liiv M is less than 100,000 because the environment does not allow active promotion at bank branches, which is a challenge that needs to be resolved."

Currently, the Kookmin Bank labor union is opposing the sale of Liiv M services at bank branches, arguing that it could lead to excessive performance competition among employees, resulting in work overload and pressure. The management emphasizes that the financial-telecommunications convergence aligned with the trend of integrated services can be a competitive advantage for the bank and is negotiating with the union to ensure that the Liiv M service does not translate into work pressure for employees.

Despite difficulties in active branch sales and promotion due to union issues, Yang said, "The launch of new Liiv M rate plans targeting Kookmin Bank’s main customer groups such as police officers, public officials, and teachers is receiving a positive response." He added, "There is a growing trend of people purchasing unlocked devices and using budget phone plans, so if this issue is resolved, we will definitely be able to demonstrate the synergy of financial and telecommunications convergence."

Kookmin Bank is currently undergoing the review process after applying to the Financial Services Commission for an extension of its budget phone business. Yang explained, "Although the designation of Liiv M as an innovative financial service expires in April, the structure allows for extension through review." He also said, "There is a possibility that other banks will enter the budget phone market under the financial regulatory sandbox, and if the market expands, it could have a positive effect."

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