[Photo by Kakao Bank]
South Korea’s online-only bank, Kakao Bank, said Friday it has hit the 10 million account milestone in just two years of operation, far overwhelming its earlier rival.
The bank went into service in July 2017, three months after the launch of the country’s first internet-only bank K-Bank. Backed by Korea’s leading mobile messenger platform KakaoTalk, it garnered 1 million accounts in its first five days of service and doubled that number in less than two weeks. It continued to grow at a rapid clip, hitting the 5 million mark in January 2018. K-Bank users have stayed stagnant at around 1 million.
While the pace of growth had somewhat slowed, it still managed to attract a steady stream of new customers, surpassing 8 million accounts in January this year.
The growth was largely driven by young Koreans. As of late June, 32.1 percent of Kakao Bank customers were in their 20s, 31.2 percent in their 30s, and 21.0 percent in their 40s. When looking at Korea’s entire population, this means 46.4 percent of all 20s and 42.8 percent of all 30s are using Kakao Bank.
Over the past two years, deposits had surged 20 times to 17.6 trillion won ($14.9 billion) and loans 30 times to 11.3 trillion won.
[Photo by Kakao Bank]
What has set it apart from traditional banks with brick-and-mortar presence is its convenience, Kakao Bank said, as it allows users to create accounts 24 hours a day and attain loans without documentation. The incorporation of Kakao Friends characters featured on KakaoTalk, the most commonly used mobile chat platform among Koreans, has added to its familiarity, it said.
Kakao Bank delivered its first quarterly profit in the first three months of this year, faster than industry expectations that had projected more than three years. In line with its steady growth, it has also secured a series of rights offerings, raising its cash stockpile to 1.3 trillion won.
The bank plans to introduce a new set of midrange loan products next month. It is also said to be readying an initial public offering in the next couple of years.
By Lee Seung-hoon and Kim Hyo-jin
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]