Rapid Growth of Bank App Users... Majority Prefer Non-Face-to-Face Services

8 to 9 out of 10 Cases of Personal Loans, Savings/Time Deposits, and Funds Are Conducted Non-Face-to-Face

[Asia Economy Reporter Park Sun-mi] As bank application (app) functions expand and demand for non-face-to-face services increases, the proportion of non-face-to-face financial product subscriptions at commercial banks is rapidly rising. In some banks, the proportion of non-face-to-face transactions for credit loans, savings/deposits, and funds reaches 9 out of 10 cases.

According to the financial sector on the 1st, the number of subscribers to Woori Bank’s representative app, ‘Woori WON Banking,’ was recorded at 19.034 million as of the end of the third quarter. The number of subscribers increased by 489,000 up to the third quarter of this year from 17.976 million in 2019 and 18.545 million in 2020. At the current pace, the total increase this year is likely to exceed last year’s 569,000.

The number of customers subscribing to non-face-to-face products is also rapidly increasing. It expanded from 1.384 million in 2019 to 1.551 million last year, and increased to 1.678 million in the first half of this year. As of the end of the third quarter, the number stands at 1.726 million.

The proportion of non-face-to-face subscriptions for installment savings and funds is overwhelming. The non-face-to-face subscription rates for installment savings and funds were 89.6% and 82.6%, respectively. This means that 8 to 9 out of 10 subscribers sign up for products online or via mobile rather than at bank counters. The non-face-to-face proportion of credit loans also jumped from 55.9% at the end of last year to 67.2% at the end of the third quarter this year.

In particular, Hana Bank’s non-face-to-face subscription proportion has increased significantly. The number of ‘Hana One Q’ subscribers reached 12.599 million as of the end of the third quarter. This is a significant increase compared to 10.557 million in 2019 and 11.842 million in 2020. During this period, the non-face-to-face proportion of Hana Bank’s credit loans recorded 92.2%, showing a sharp increase compared to 82% in 2019 and 86% last year. The proportions for funds and savings/deposits were 92.9% and 58.1%, respectively.

Shinhan Bank’s representative app ‘SOL’ recorded 9.53 million monthly active users (MAU) as of the end of the third quarter, nearly a 40% increase from 6.85 million at the end of last year. In particular, the proportion of cross-selling customers through group platforms, including the bank app SOL, also rose by 1.9 percentage points to 42.1% compared to the end of the previous year.

The digital coverage ratio of this bank’s loan and deposit products approaches 70%. Especially, the digital coverage of loan products increased from 46.6% in 2019 and 55.5% last year to 61% in the third quarter this year. Deposit products also rose to 68.4%.

Banking Sector Focused on Building Optimal Apps... Financial Authorities Aim to Enable “Digital Universal Bank”

The number of subscribers to KB Kookmin Bank’s KB Star Banking app also increased by 942,000 to 17.623 million as of the end of the third quarter compared to 16.681 million at the end of last year. On the 27th of last month, KB Kookmin Bank revamped the KB Star Banking app focusing on customized services for ‘customers (me)’ in all aspects including access and usage, moving closer to its goal of becoming the ‘Number One Financial Platform.’

The surge in bank app users and non-face-to-face product subscriptions is interpreted as a result of active product development driven by the spread of COVID-19 and the need to strengthen digital transformation to compete with internet-only banks. The improvement of app usage environments by consolidating scattered financial apps within the group and adding lifestyle-oriented services is also cited as a factor.

However, due to recent tightening of household loans by financial authorities, there is a forecast that rapid growth in the fourth quarter will be difficult as restrictions on non-face-to-face transactions for some loan products are forming. From the end of this month, non-face-to-face jeonse loan applications for homeowners with one house will be impossible at all commercial banks except K Bank. Financial Services Commission Chairman Ko Seung-beom said at a recent meeting with major commercial bank CEOs, “We will actively support changes for banks’ digital transformation,” and “We plan to create institutional conditions to enable a ‘Digital Universal Bank.’”

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