'You Have to Stand Out to Survive'... The Era of Banks' 'MZ Special Offers' (Comprehensive)

Time Deposits at Banks Hit Lowest in 2 Years
More Customers Turning to Stocks and Cryptocurrency
Banks Launch Themed Special Offers with 'Story' Elements

(Photo by LCK Weekly Speed YouTube video)

[Asia Economy Reporter Kim Jin-ho] Recently, a spectator's cheer sign phrase at the professional league of the online game ‘League of Legends (LoL)’ became a hot topic. The cheer sign read, ‘Fighting GEN.G, take responsibility for my LCK (LoL Champions Korea) savings interest rate.’ It drew laughter from many as it humorously pressured the team to win, implying that the better the team’s performance, the better the interest earned on the bank savings product.

It has now become an era where even special bank products must ‘stand out to sell.’ Major commercial banks are partnering with online games, professional baseball, and other fields to continuously launch various creative products. This is interpreted as a strategy to attract the 2030 MZ generation (Millennials + Generation Z), who have shifted their attention from stable savings to stock and cryptocurrency investments.

According to the Bank of Korea and financial authorities on the 18th, amid the prolonged low-interest-rate environment over the past two to three years, the trend of withdrawing deposits and savings to move money into stocks or cryptocurrencies is accelerating. As of April, the balance of regular savings deposits at deposit banks was 33.265 trillion won, the lowest level in two years. Compared to the end of last year (39.263 trillion won), when the cryptocurrency boom began, nearly 6 trillion won has been withdrawn.

Consumer interest in special bank products, which were popular due to their interest rate merits, has also significantly declined. A bank official said, "As money rapidly flows into investment markets such as cryptocurrencies and stocks, sales of special bank products are not what they used to be," adding, "Especially, the influx of young customers has decreased significantly compared to before."

Banks Embedding 'Stories' in Special Products

To attract future customers from the MZ generation, banks have adopted differentiated strategies. A representative example is special products. Instead of simply targeting university students and young office workers, they have designed products around specific themes such as professional baseball or popular online games. They have incorporated ‘stories’ into the products to appeal to the strong individuality of the MZ generation.

Woori Bank’s ‘Woori LCK Savings,’ launched on the 9th, is a prime example. Among the 10 LCK teams overwhelmingly popular among young people, customers can directly choose the team they support when subscribing. Depending on the performance of the chosen team, customers receive a preferential interest rate of up to 0.7 percentage points, and depending on the number of subscribers, up to 0.3 percentage points more. The highest interest rate is 2.0% per annum.

This savings product sold 3,300 accounts (2 billion won) as of the 16th, just one week after its launch. A Woori Bank official said, "Interest is hot because the interest rate varies depending on the supported team," and added, "The MZ generation accounts for more than 80% of subscribers, and the product is highly regarded within the bank."

Notably, 30% of subscribers are new customers, a higher proportion compared to other products. Due to the collaboration with gaming, the proportion of males aged 25 to 34 was also high at 35%.

Shinhan Bank has teamed up with professional baseball to target the MZ generation. Shinhan Bank’s ‘2021 Shinhan Professional Baseball Savings,’ launched at the end of March, offers a maximum annual interest rate of 2.4%, including a preferential rate of 1.4%. Similarly, the preferential interest rate is determined by the performance of the team chosen by the customer. As of the 15th, a total of 67,260 accounts have been sold.

Another bank official said, "Special products targeting the MZ generation are part of a long-term strategy to secure future customers," and added, "We expect differentiated special products that offer fun and convenience to meet their needs will continue to dominate."