Banks Crossing the Line, 'Sleeping with the Enemy' to Expand Business (Comprehensive)

Partnerships with Big Tech and Game Companies
Collaboration with KakaoPay, Toss, and Others Underway

[Asia Economy Reporter Park Sun-mi] Due to the blurring boundaries in the financial industry, banks that have been restraining internet companies have instead chosen a bold "cohabitation with the enemy" by partnering with big tech and gaming companies. Although these entities could easily become competitors at any time, banks calculated that if utilized well, they could create synergy in expanding their business areas.

On the 14th, among the five major commercial banks, Shinhan, Hana, and Woori Banks are recognized as actively expanding their business partnerships with internet companies. Shinhan Bank plans to allow customers to easily search and apply for its Jeonse loan products on Naver Real Estate starting mid-month.

Until now, Shinhan Bank customers had to separately check their individual loan limits and interest rates and apply for loans at Shinhan Bank after searching for Jeonse properties on Naver Real Estate, the country's top real estate information platform, which was inconvenient. The "cohabitation" between Shinhan Bank and Naver Real Estate is expected to benefit both Naver's entry into the real estate business and Shinhan Bank's customer base expansion. Separately, Shinhan Bank is also expanding its cooperation with Naver Pay by running an event until the 30th of next month, offering points to customers who apply for Shinhan SOL Jeonse loans through Naver Pay.

Woori Bank has also chosen to "cohabit" with big tech. Woori Bank is partnering with Naver Financial to launch a dedicated credit loan product for Naver Smart Store business owners in the second half of this year. In addition to launching a dedicated loan product for small business owners selling products on Naver, they plan to expand financial support cooperation projects for small businesses by utilizing non-financial data and broadening loan eligibility. Previously, Woori Bank attempted to build a "Smart Campus" combining cutting-edge IT and finance through a tripartite business agreement with Naver and Yonsei University.

About ten commercial banks, including Shinhan, Woori, and Hana Banks, are collaborating with Kakao Pay or Toss on loan comparison services. This service allows users to compare loan products, loan limits, and interest rates from various financial companies at a glance.

Gaming Companies Securing the MZ Generation Are Also Important Partners

Collaboration with internet gaming companies is also expanding.

Hana Bank signed a strategic business agreement with game company Netmarble to provide innovative digital financial services targeting the MZ generation, the main users of games, with a new asset management service planned for the second half of this year. Hana Bank and Netmarble will also conduct various joint marketing activities encompassing finance and gaming. Shinhan Bank is cooperating with Nexon, a game company with a large MZ generation customer base. They plan to discover new business models based on artificial intelligence (AI) and data, promote payment businesses based on financial infrastructure, and pursue joint marketing projects linking finance and gaming.

These attempts by the banking sector stem from the strategy that, amid rapidly changing financial trends, digital transformation, and platform competitiveness, synergy can be created by partnering with internet companies that already possess accumulated data and know-how. Shin Yong-byeong, Chairman of Shinhan Financial Group, said in his New Year's address earlier this year, "In a situation where all companies, regardless of industry, are staking their lives on digital, Shinhan's fate will also be determined by digital transformation," adding, "We will cooperate with various companies such as fintech and big tech and make bold investments in digital companies with excellent technological capabilities."

Industry insiders expect that, since financial sector leaders have already declared in their New Year's addresses that they will both compete and collaborate with big tech, such cross-industry alliances breaking down boundaries will continue.

A banking sector official explained, "Banks are trying to provide differentiated innovative services by integrating big tech's accumulated IT and portal expertise," adding, "There is an advantage in discovering competitive new businesses based on partnerships with big tech." Another official said, "This trend reflects efforts to overcome existing financial barriers, increase customer convenience, and expand lifestyle financial services through collaboration with internet companies."