Digital banking in South Korea: Kakao Bank attracts more than 1 million accounts in 5 days

Kakao has launched Kakao Bank as the second internet-only bank in South Korea and eight hours after its launch about 230,000 users have downloaded the mobile application and about 103,000 new bank accounts were created. The bank said Monday it has attracted more than 1 million accounts in five days since its launch, a potential game-changing development in the country’s financial sector.

The bank said the number of clients hit the milestone as of 1 p.m. on Monday, with deposits and loans being estimated at 344 billion won ($307 million) and 323 billion won, respectively. It means that the lender has attracted customers at the pace of 9,800 accounts an hour.

Kakao Bank CEO, Yun Ho-young, apologized for the server issues that accompanied the first hours of service launch. Kakao Bank in a press conference said the server is currently able to handle a maximum of 100,000 new customers online.

Kakao Bank’s performance far surpassed that of K-Bank, the nation’s first Internet-only bank, which began operations in April.

Kakao Bank was launched by Kakao Corp., the operator of South Korea’s most widely used mobile messenger Kakao Talk.

Users can open accounts easily with a mobile phone number and ID card without having to visit a conventional bank branch.

Kakao Bank managed using a mobile platform allows users to make regular deposits with higher interest rates and get loans with lower interest rates than traditional banks. The service runs on the most popular Kakao Bank messenger app. The bank announced that the commission fee for overseas transfers is one-tenth lower than traditional banks. A virtual bank innovation was created to challenge how banks and technologies are put together and work.

Source: koreaherald.com