SEOUL, April 4 (Korea Bizwire) – Yesterday marked the official launch of South Korea’s very first online-only bank, K Bank, and more than 20,000 new customers have already signed up to open new accounts.
On the day the bank launched its service, nearly 15,320 internet-only bank accounts were opened by three in the afternoon, surpassing the monthly average number of new customers at major South Korean banks.
K Bank saw more than 1,000 loans and nearly 13,500 debit cards issued on day one, while the monthly average number of newly-opened accounts from December 2015 to December 2016 at major South Korean banks was estimated at 12,000.
One official from K Bank said, “From the opening day alone, we saw more customers join our bank than other banks do in a month.”
Most banking services including loans will be provided online for both mobile devices and desktop computers, as the online-only bank will have no physical branches.
K Bank is expected save on labor costs, which will allow it to offer loans at competitive interest rates with simpler application procedures and security checks such as a fingerprint scan.
The attention and popularity from opening day is likely to continue for some time, as the bank will offer loans to customers with lower credit ratings and allow its clients to choose to receive savings interest in the form of a gift card for music streaming sites.
While simpler procedures without having to visit and wait at a physical branch should provide swifter and more convenient banking services, commercial banks are now being pressured to step up to compete with the newest player in the industry.
In response to the popularity K Bank has enjoyed since its opening, Yoon Jong-Gyu, president of KB Bank, said, “Today is the day K Bank launches its 24/7 service. Our digital rivals are going after niche markets when there are customers who are not satisfied with their banks.”
Yoon also said “to make decisions quicker and provide service to our customers” is the only way forward.
The popularity of online-only banks is likely to grow, as is competition in the nascent market, as messaging giant Kakao is set to launch its online-only banking service Kakao Bank tomorrow.
Hyunsu Yim (email@example.com)