Banks Launch Unique Products Embracing Fun and Storytelling

Tobacco Prices, Dokdo Walking Savings, etc... Eye-Catching
Consumer Interest Rises in Participatory Products

[Asia Economy Reporter Kim Jin-ho] Office worker Kim Geun-ho (28, pseudonym) recently signed up for Woori Bank's 'Woori LCK Savings' together with his university friends. With no proper entertainment due to the COVID-19 Level 4 restrictions, watching the League of Legends Championship Korea (LCK) on YouTube and chatting in their group chat after work became their pastime. They found it interesting that the 'preferential interest rate' changes depending on the performance of the team they support, so they all signed up together. Since each friend supports a different team, the daily changing rankings became their only interest.

In an unprecedented ultra-low interest rate environment, deposit products from commercial banks, which had lost appeal, are now targeting consumers by incorporating 'fun and stories.' Simple 'participatory products,' rather than complicated and off-putting conditions like credit card usage amounts, are meeting consumer needs and gaining popularity.

According to the financial sector on the 13th, major commercial banks have recently introduced unique savings and deposit products one after another. With recent instability in liquidity markets such as cryptocurrencies and stocks, consumer interest in safe assets like bank deposits is gradually reviving. Especially, the possibility of the Bank of Korea raising the base interest rate as early as this month is being discussed, which could further increase demand for deposits and savings.

BNK Busan Bank's 'Cigarette Price Savings' product is a representative example. It is a smoking cessation-specialized product available to adults aged 19 and over, both smokers and non-smokers. If all preferential interest conditions are met, it offers a high interest rate of up to 3.0% per annum. Since non-smokers can also join, it is popular among women who are highly interested in financial management. In fact, 78% of the current subscribers are female customers.

NH Nonghyup Bank introduced a savings product themed around Dokdo. The basic interest rate is only 0.5%, but if missions are completed, up to 1.8% interest is applied. The product is based on the 'Digital Dokdo Walking Contest,' where participants walk the 420 km (about 600,000 steps) distance from Seoul to Dokdo to receive preferential interest. For each participant who achieves this, 6,000 KRW is raised as a fund to support Dokdo environmental conservation projects.

DGB Daegu Bank's 'Daefrica Deposit and Savings' product also became a hot topic mainly in online communities. Considering the regional climate characteristics, preferential interest rates are given when the temperature exceeds 38 degrees Celsius or on tropical night days, earning praise from consumers for 'getting the concept right.'

Woori Bank's 'Woori LCK Savings' is popular mainly among the MZ generation (Millennials + Generation Z). Customers can directly choose the team they support among the 10 LCK teams when signing up. Depending on the performance of the chosen team, up to 0.7 percentage points, and depending on the number of subscribers, up to 0.3 percentage points of preferential interest rates are applied. The maximum interest rate is 2.0% per annum. Shinhan Bank also launched a similar product called '2021 Shinhan Professional Baseball Deposit and Savings.'

The reason commercial banks are introducing these participatory structured 'special deposit and savings products' is mainly because, over the past few years, bank special offers were created as performance-based structures linked to credit cards, which caused strong consumer resistance. A financial sector official said, "From the consumer's perspective, there may be fatigue with complicated special offer conditions," adding, "Even if high interest rates are offered, when you look into it, you have to use your credit card several million won per month, so who would want to sign up?"

Meanwhile, the likelihood of more special deposit and savings products being launched by commercial banks in the second half of this year is high. This is because the Bank of Korea is expected to enter a full-fledged interest rate hike phase, possibly raising the base rate as early as this month. As the interest rate rises, consumer demand for special deposit and savings products, which were neglected during the low-interest period, is expected to revive.

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