Korea’s digital banks have two speeds: fast and faster
Summary
Sanjeev Rana, a senior technology analyst in Korea at CLSA, says union power made the financial authorities reluctant to foster innovation that could disrupt the way the traditional banks work. The bank found that anyone who loved the bouncing, dancing cartoons was far more likely to open an account.It drew on that knowledge, allowing users to download the much-loved emoticons, which range from crooning penguins to gentle lions and piano-tinkling crocodiles.Customers loved being able to personalise their in-app services, or apply for a debit card adorned with an image of Neo, a sleek and suave urban cat, or the afro-toting secret agent Groovy Jay-G.Simple stuff, but reflective of Apple co-founder Steve Jobs tactic of figuring out what a customer is going to want before they ask for it. It is still adding customers at a furious rate, while introducing new services and products, including term deposits and unsecured loans for prime and sub-prime customers.Even though it already thinks and acts like a high-functioning and well-run lender, kakaobank is keen to retain its underdog status, allowing it to continue to hide in plain sight for as long as possible.We are still weak and small, strategy head Lee insists, despite ample evidence to the contrary. We need to avoid competition and focus on areas where we are strong and where the traditional banks are weak.Looking back, the reticence felt by the financial regulator when allocating new digital licences was perfectly understandable.This is a thrillingly vibrant economy with a tendency to fervently embrace any new idea or concept, as long as it guarantees customers the divine troika of entertainment, connectivity and convenience. When this project started in 2015, our traditional lenders knew that digital banking was the way forward, but they didnt know how fast the future would arrive.The pace of change over the past five years has been so rapid, but the next five will be faster still.