Welcome Savings Bank "Preferential interest rates for using savings/deposits and loans together"

Interview with Kim Jae-sik, Vice President of Welcome Savings Bank
Secondary Financial Sector Faces Growth Limits Due to Differences in Deposit and Loan Customers
"Overcoming Chronic Issues with Interest Rate Benefits and Rewards"
Advanced Tech Finance Ensures "No Problems with Risk"

Kim Jae-sik, Head of Digital Finance Division at Welcome Savings Bank, is being interviewed on the 4th at the headquarters of Welcome Savings Bank in Guro-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

"The secondary financial sector has separate customers for deposits and loans, which leads to marketing costs and makes virtuous cycle growth difficult. Solving this to secure competitiveness is Welcome Savings Bank's goal."

Welcome Savings Bank has set a goal to resolve the phenomenon of 'mismatch between deposit and loan customers.' Their strategy is to overcome what is considered a limitation of the secondary financial sector by leveraging interest rate and reward competitiveness. If successful, it will be the first time in the secondary financial sector to have a growth structure similar to that of commercial banks.

On the 4th, Kim Jae-sik, Vice President of Welcome Savings Bank, explained at the headquarters located in Guro-gu, Seoul, "Ultimately, we hoped that loan customers who bring profits to the company would also come as deposit customers," and added, "We thought about ways to share the profits we generate with loan customers."

The secondary financial sector has a different interest rate structure from commercial banks, so deposit and loan customers are separated. Loans are mainly used by middle- to low-credit borrowers and the elderly, while deposits are used by high-credit borrowers and young people. To create loyal customers and achieve balanced virtuous cycle growth, these separated customers must be aligned.

Key to Preferential Interest Rates and Reward Cards: "Advantageous Risk"

Welcome Savings Bank pointed to preferential interest rates and reward systems as solutions. The approach is to provide tangible benefits the more customers use both loans and deposits. Vice President Kim said, "Our check card's basic function offers a 1% reward, but loan customers receive an additional 1% point preferential treatment, and preferential interest rates on regular savings are also under review," emphasizing, "Loan customers can consistently receive cash rewards through content available only to them."

He continued, "Deposit customers also receive preferential interest rates when they use loans," and revealed, "On average, deposit customers receive about a 1% point preferential interest rate on loans." It was identified that some customers received interest rate discounts of over 2 percentage points depending on the case. Considering that the usual preferential interest rates for salary transfers and payment performance in the secondary financial sector are within 0.1 to 0.5 percentage points, this is a remarkable benefit.

Vice President Kim evaluated that this interest rate strategy is also advantageous from a risk management perspective. The better the deposit performance, the lower the loan risk. He said, "We analyzed data of loan customers for risk management and found that even with the same credit rating, deposit customers with high activity on the application (app) were also sound in loans."

He expressed confidence that underwriting capabilities have been advanced through fintech. Vice President Kim stated, "We collected and analyzed about 70,000 variables across 14 conditions that other companies could not select over five years," and mentioned, "We developed a system called WAS (Welcome Alternative Score) which is applied to loans, and we believe it will be stably established in the market."

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