Introduction of K bankDigital-Only Bank Experiences in Korea
2019
Ⅰ. Overview of K bank
What is digital-only bank?
Traditional Incumbent Bank
Customers have to visit to branches to get
banking services
Non-face-to-face channels are secondary
Call Center
Mobile/web
ATM
Bank Centric
(off-line channel)
Customers access to banking service
anytime and anywhere
All services are done by non-facial
processes
No Branches
Call Center
Mobile/web
ATM
Customer Centric
(digital channel)
Digital-Only Bank
Oct
Jan 2016
Jul
Jun 2015
Dec
K bank incorporated for biz preparation
K bank obtained final approval (12.14)
K bank grand open (4.3)
Nov
Announced a plan for digital-only bank
2 consortium selected(K bank, Kakao bank)
Apr 2017
Kakao bank grand open (7.27)
Applied biz plans for pre-approval
Intents of digital-only bank introduction
“Improve convenience for customers with technology”
“Promote market competition especially for innovation”
“Enhance fintech competitiveness and globalization”
New bank license in 24 years in KoreaPre-approval in Nov 2015 and grand open in Apr 2017
Deposit in K bank close to ~1.9 T KRW
(Loan close to ~1.3 T KRW)
~858 thousand total customers
K bank made successful debut in KoreaK bank played important roles for soft-landing as the FIRST digital-only bank
Source: News article, Korea FSS
260
379
530
642
723 762
858
# of account (Thousand)
Deposit (Billion KRW)
Loan (Billion KRW)
220
600 656
858
1,030 1,134
1,264
315
643
861
1,089
1,294
1,574
1,862
'17.04 '17.06 '17.09 '17.12 '18.03 '18.06 '18.12
K bank ShareholdersTop leading companies in the field of finance, ICT, platform and global business
Finance
Telecom
Platform
ICT Global
Capital
K bank’s offerings
Deposit
Dual K
Music K
Code K
Prime
Sub-prime
Overdraft
SOHO
Check card
Quick remittance
Simple Payment
Banc-assurance
Foreign Currency
- Switchable in checking & savings account
- Digital interest with music voucher
- Provide prime rate with Partner code
- Easy & Fast loan without any document
- Advanced CSS for the thin-filers
- Loan by your Finger Print Authentication
- Merchant oriented loan
- Payback your Phone Bill (KT user)
- Quick & Easy remittance by simple password
- pay with QR code, account based settlement
- Accurate & Easy comparison by simple personal information
- Easy & Fast foreign currency remittance
Loan
Trasac-tion
Fee-Biz
DescriptionItems
K bank’s channel
Primary channel
Savings
Checking
Provide prime rate if you maintain account for 1
month
Easy to withdrawal
with basic rate
Over 10,000 store all across the country
Accessible services on ATM
• Deposits & Withdrawal• No Card transaction• Check card issuance
Mobile App
Internet (Web)
Handy access through convenience stores
Ⅱ. Innovation led by K bank
Digital innovation led by K bank
Analysis
Technology
I
Ⅱ Seamless banking
100% Non-facial process
Ⅲ Simple banking
Convenience
Competitive priceICT combined
Product / ServiceⅣ Ⅴ
Create new
business areaⅥ
Open account without visiting branch
Offer loan without any document
Automatic recognition of public ID
Open
Account
PaymentDeposit
RemittanceLoan
Asset
mgmt
Video Call
Scrapping Method
100% Non-facial process
Ⅰ 100% non-facial processK bank designed 100% non-facial process without document required
53%
57%
43%
47%‘17.4
‘18.12
‘17.4
‘18.12
09:00~16:00
16:00~09:00
Ⅱ
Source: K bank analysis
Deposit account opening ratio by timeline
Seamless Banking : 24 hours 7 daysChanged customer’s bank usage pattern
Ⅲ Simple Banking : Customer Centric ServiceDesigned service by going back to customer needs
Banks have various apps with each
functions : verification, OTP, etc.
All in one app
VS
Enable fast and convenient one-stop
banking service
Speedy Banking
Most used service in mobile
banking : checking balance and
money transfer
Check balance and transfer money
without log-in
Ⅳ
100
~10
~45
~30
~15
TotalSG&A
Personell(HQ)
Personell(Branch)
Rent Others
Branch cost burden on traditional banks
Branch
costs
account
for
~75%
of total
SG&A
Competitive pricingBased on low cost structure
Source: Experts interview
Deposit interest
Loan interest
Digital-only bank has advantage on
pricing due to no branch cost
• Easily switch some part of your checking
account into savings account
• Merit combination : Convenience of checking
account + Benefit of savings account
Dual Account Digital Interest Deposit
Music voucher
instead of cash interest
Better benefits
than cash interest
Collaboration with kt Music
Ⅴ ICT combined new product ICT enables new trials which existing banks have never tried before
Break old-notion of bank account :
Switchable with your finger sliding
Savings Checking
KRW KRW
Voice Banking with AI speaker24 hour Convenience Store Bank
Major features
• Public ID scan
• Transaction without card
• Check card issuance
• Palm vein authentication
ᆞCheck balance
ᆞEasy money transfer
ᆞProduct recommendation
Ⅴ ICT combined new serviceICT enables to permeate banking into daily life
Credit Scoring System
Telco DBPayment
DB
Other share-
holder DB
Financial
DB
■ Minor lender ~35%
■ Savings bank ~26%
■ Capital ~22%
■ Card Loan ~15%
■ Bank ~5%
Avg. annual loan rate
“Blind spot”
for loan
(5 ~ 15%)
Near prime area
Conventional
CSSwith financial
DB only
Telecom Behaviors1
• Traffic (Stable housing)
• Roaming (Overseas trip)
Phone Bill Info.
• Usage level
• Payment history
Ⅵ Develop new business areaK bank offers mid credit loan to the right customer with big data analysis
1. Using TBI (Telecommunication Behavior Index made by KT Big Data Center)Source: Bank of Korea
Thank you
Top Related