KakaoBank Enters Season 2 with Launch of Non-Face-to-Face Mortgage Loans and Global Expansion (Comprehensive)

[Asia Economy Reporter Buaeri] KakaoBank, which succeeded in its initial public offering (IPO) last year, is preparing for Season 2. On the 22nd, it will launch a mortgage loan product and plans to expand globally in the future.

Chatbot Consultation Mortgage Loan Launch... No Prepayment Penalty Until the End of This Year

On the 15th, Yoon Ho-young, CEO of KakaoBank, explained at an online press conference, "The convenient experience of unsecured loans that we confirmed at the launch of KakaoBank can now be experienced with mortgage loans as well."

KakaoBank's mortgage loans target apartments located in the metropolitan area priced at 900 million KRW or less based on KB market prices. The loans cover new home purchase funds, refinancing of existing mortgage loans, living stabilization, and rental deposit return loans. The maximum loan amount available is 630 million KRW.

The repayment period can be chosen from 5, 15, 25, or 35 years. If 5 years is selected, a variable interest rate applies, with loan rates ranging from 2.989% to 3.535% per annum. For 15, 25, or 35 years, a mixed interest rate of 3.595% to 3.930% per annum applies. After the fixed interest period ends, rates of 2.876% to 3.527% per annum will be applied. As of the 10th, these rates are up to 1.7 percentage points lower than the variable rates (3.580% to 5.230%) of KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup banks. Repayment methods can be chosen between equal principal installment repayment and equal principal and interest installment repayment.

KakaoBank will waive prepayment penalties 100% until the end of this year. Song Ho-geun, head of the Mortgage Loan Studio team, said, "We considered how to reduce customers' financial costs the most," adding, "This will likely be the first in the banking sector."

KakaoBank's mortgage loans are conducted through chatbot conversations from loan application to inquiry and execution, which were traditionally done at bank counters.

When customers apply for a mortgage loan, a chat window with KakaoBank's chatbot opens, and after entering information, the loan limit is checked, and document submission, loan screening, and loan execution are all conducted within the chat window. Baek Hee-jung, head of KakaoBank's Mortgage Loan Service Cell team, said, "We adopted a conversational interface to implement the psychological reassurance that comes from face-to-face interactions at branches into the mobile app screen."

When applying for a loan, the chatbot calculates the loan limit and interest rate by reflecting conditions such as Loan-to-Value ratio (LTV), Debt-to-Income ratio (DTI), and Debt Service Ratio (DSR). Changes in loan limits and interest rates can also be checked by entering different income levels.

The burden of submitting loan documents has been minimized. Real estate sales contracts can be submitted by taking a photo. Other required documents are directly verified by KakaoBank connecting with related institutions with the customer's consent.

For home purchase loans requiring ownership transfer registration, a notary affiliated with KakaoBank visits the customer on the payment date. Information about the notary is also provided through the chatbot. For refinancing loans of existing home purchase funds, rental deposit return loans, and living stabilization loans that do not require ownership transfer, the loan process is completed non-face-to-face through electronic registration.

Song Ho-geun, head of the Mortgage Loan Studio team, said, "Since KakaoBank launched the rental deposit loan in 2018, non-face-to-face and mobile processes have rapidly progressed, and now mortgage loans will also become the trend for mobile non-face-to-face loans within 4 to 5 years," adding, "KakaoBank will gradually expand the eligible regions and properties for mortgage loans." KakaoBank plans to extend mortgage loan targets beyond apartments to include villas and detached houses. A fixed-rate product, the Bogeumjari Loan, is also scheduled to be launched.

Establishment of 'Studio', Organizational Restructuring and Global Expansion

CEO Yoon also revealed KakaoBank's direction for this year. He said, "If the convenience felt at your fingertips was Season 1, Season 2 is about deciding the loan supply direction from the perspective of social responsibility growing together with society," adding, "This year, we will prioritize loans for low- and middle-credit borrowers and focus on housing stability." KakaoBank also announced plans to enter the corporate loan market as early as the second half of this year through loans for individual business owners. Additionally, 20 billion KRW will be invested over five years to prevent fraud such as phishing.

To foster innovative growth, KakaoBank established a 'Studio' organization from the original team-based system. The Studio is an organization where product planners and developers explore innovation directions. The recent mortgage loan was also prepared through the Mortgage Loan Studio. CEO Yoon explained, "Through organizational restructuring, we divided the technology team by area to accelerate innovation." KakaoBank segmented the technology team into 'Platform Finance,' 'IC Technology Group,' and 'Trust Technology Group,' appointing each group leader as an executive.

KakaoBank will begin preparations for global expansion starting this year. CEO Yoon stated, "It is difficult to disclose which country we are targeting yet, but non-face-to-face mobile technology will be a significant asset for overseas expansion," adding, "Global expansion is a field we definitely want to achieve, and we aim to showcase Korea's financial capabilities."

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