"Inbaeng 30 Million Era... Mom Uses Gyemoim Account, Daughter Saves with Animal-Keeping Savings"

Mortgage Loan Consultation Like Chatting on KakaoTalk
Launch of Savings Products Like Mobile Games
Capturing Middle-aged and MZ Generations
Convenience and Interest Rate Benefits Have Limits
Essential to Prepare for Long-term Growth

Internet-only banks, with a combined subscriber base reaching 30 million, are aggressively attracting users by reinterpreting existing commercial bank products to capture the MZ generation (Millennials + Generation Z) and expanding their reach to middle-aged and older customers. According to the three internet banks, KakaoBank has 19.13 million subscribers, K Bank has 7.8 million, and Toss Bank has 3.6 million.

On the 28th, financial authorities reported that for traditional commercial bank products like mortgage loans, KakaoBank has targeted users with a dramatically more convenient non-face-to-face method. The non-face-to-face mortgage loan launched by KakaoBank in February features a ‘conversational’ interface that feels like chatting on KakaoTalk, enhancing convenience. The average time to check loan eligibility and interest rates is 3 minutes and 29 seconds. The cumulative contracted amount has surpassed 262 billion KRW. The share of users in their 40s and 50s reaches 43%.

Additionally, KakaoBank has captivated not only young customers but also senior clients with innovative reinterpretations of existing products such as free installment savings accounts without fixed payment dates or counts, group accounts, and piggy banks that collect leftover balances. Notably, the group account has a 38.2% user ratio in the 40s to 60s age group. Although commercial banks originally introduced group accounts in 2011, they have withdrawn from the business as KakaoBank’s group accounts gained popularity. An industry insider said, "The growth speed of KakaoBank is quite fast even on a global scale." Globally, internet-only banks typically take 4 to 8 years to turn a profit, but KakaoBank succeeded in turning profitable just over two years after its establishment. The only comparable growth speed worldwide is China’s WeBank.

Toss Bank is also employing a strategy similar to KakaoBank’s successful formula. Toss Bank is rapidly growing based on the ‘Toss’ platform. It prominently displays Toss Bank at the top of the Toss platform, which has 22 million users. It has also continued bold attempts such as launching a deposit and withdrawal account with an annual interest rate in the 2% range. Additionally, it actively utilizes character marketing. Toss Bank recently launched ‘Grow Savings,’ featuring cute animal content where animal characters grow weekly. KakaoBank previously succeeded in targeting the MZ generation through marketing using ‘Kakao Friends’ characters.

Unlike Kakao and Toss, K Bank, which cannot expect platform effects, has increased subscribers through aggressive partnership strategies. In June 2020, during the cryptocurrency boom, K Bank partnered with Upbit to raise awareness and grew exponentially. K Bank’s subscribers, which numbered 2.19 million in 2020, increased by nearly 5 million in 2021 alone, reaching over 7 million. K Bank, which gathered subscribers, maintained a ‘lock-in effect’ by offering the best interest rates among internet-only banks. K Bank provides a 3% range annual interest rate on fixed deposits without conditions and has introduced savings accounts with interest rates in the 5% range. Recently, it lowered interest rates on apartment mortgage loans and jeonse (key money) loans by up to 0.41 percentage points annually.

However, experts advise that internet-only banks need to prepare long-term growth strategies. Internet-only banks have so far benefited from the surge in non-face-to-face transactions due to the COVID-19 pandemic. Experts point out that if they continue to compete with commercial banks solely on convenience and interest rate competitiveness, they will be at a disadvantage in terms of capital scale, limiting their long-term competitiveness. Professor Seo Ji-yong of Sangmyung University’s Business Administration Department said, "The profit models of internet-only banks are similar to those of commercial banks," advising, "They need to expand non-interest income and diversify fee income models by popularizing trust services and other offerings."

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