SEOUL, June 27 (Korea Bizwire) – The rapid growth of K Bank is making its rivals nervous, with some bank heads praising the success of Korea’s first internet-only bank as ‘beyond expectations’, and noting that they hope to maintain a good relationship as partners as well as contenders.
Speaking to Yonhap News, the heads of major South Korean banks discussed the challenge posed by the emerging digital bank and their plans to keep up to date with the latest online and mobile trends in the banking industry.
In response to growing competition, Wi Sung-ho, the CEO of Shinhan Bank, said the company would focus on its digital platform, a move which reflects a rising demand for digital financial services in the industry.
Among the newly proposed services are a non face-to-face ‘Sunny New Hope Spore’ loan designed for working class individuals, and a new installment savings account with high interest rates, as well as the ‘Shinhan S Dream Credit Loan’ which can be applied for without visiting a physical bank.
The head of KB Kookmin Bank, Yun Jong-gyu, on the other hand, seems to be taking a different direction.
“Working together with internet-only banks and fintech companies, we hope to create financial products and services designed to prioritize our customers’ needs,” Yun said.
Other banks were keen to emphasize the strengths of traditional banks such as higher security and more credibility.
Lee Gwang-gu, the head of Woori Bank, said, “Internet-only banks don’t have communications channels like bank branches, which limits their ability to offer good customer service and could be an inconvenience to those who aren’t familiar with mobile phones.”
“Traditional banks have the upper hand when it comes to security and credit risks,” Lee added.
NH Bank head Lee Gyung-sup said NH would focus on digital banking services, including improvements to the NH mobile banking system ‘All One Bank’, while returning to the bank’s roots by providing services catering to those in the farming industry, as the bank’s name – National Agricultural Cooperative Federation – suggests.
As more and more financial transactions are made online, financial experts believe some South Korean banks will follow in the footsteps of Citibank Korea, which announced plans to close nearly 80 percent of its physical branches in the country back in April.
Hyunsu Yim (firstname.lastname@example.org)