Kabang, First AI Algorithm Deposit Product Launched in Banking Sector

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[Asia Economy Reporter Kim Hyo-jin] Kakao Bank, a Korean internet-only bank, announced on the 25th that it has launched a deposit product applying artificial intelligence (AI) algorithm analysis to customers' accounts for the first time in the banking sector.

Kakao Bank added an 'automatic saving' rule to the 'coin collecting' rule of its small automatic saving product called 'Jeogeumtong' (Piggy Bank), which was launched in December last year. The automatic saving function analyzes the past six months' balance and transaction patterns of the linked deposit and withdrawal account using AI algorithms, calculates an appropriate saving amount for the customer once a week (on Saturdays), and deposits it into the Jeogeumtong.

The minimum saving amount through automatic saving based on AI analysis is 1,000 KRW, and the maximum amount is 5,000 KRW. Kakao Bank explained that the weekly saving limit for automatic saving was set to a maximum of 5,000 KRW to maintain the product feature of Jeogeumtong, which has a total saving limit of 100,000 KRW, allowing customers to use the product without significant burden.

With the addition of the automatic saving rule, Jeogeumtong automatically saves up to six times a week. From Monday to Friday, coin collecting under 1,000 KRW is executed, and on Saturdays, automatic saving is performed. Automatic saving does not occur if the balance of the linked deposit and withdrawal account is 10,000 KRW or less.

The automatic saving and coin collecting rules can be used separately or simultaneously according to customers' choices. Using both rules simultaneously can reduce the time to reach the saving limit of 100,000 KRW.

A Kakao Bank official said, "We will continue to actively utilize AI algorithms and big data to help customers have more useful and convenient financial lives."

Kakao Bank's Jeogeumtong reached 1 million accounts opened within just 13 days of its launch. Currently, the cumulative number of accounts is about 1.7 million.

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