On-to-Company Boosting Competitiveness Focuses on 'App'

Officially Registered Companies' App Development and Advancement Plans
Must Establish App-Based Systems as Institutional Finance Is Included
Increase Customer Touchpoints and Expand Subscription Channels Effectively

On the 11th, officials are taking a commemorative photo at the launch ceremony of the Online Investment-Linked Finance Association held at Fintech Lab in Yeouido, Seoul. From the left: Yongtae Kim, Director of the Financial Supervisory Service; Byunghoon Lim, Auditor of the Online Investment-Linked Finance Association; Chaeyul Lim, Chairman of the Online Investment-Linked Finance Association; Hyojin Lee, CEO of 8Percent; Daeyoon Kim, CEO of PeopleFund Company; Seongjun Kim, CEO of Lendit. Photo by Online Investment-Linked Finance Association

[Asia Economy Reporter Song Seung-seop] Companies that have successfully registered as online investment-linked financial businesses are developing and revamping applications (apps) that provide their services. As they are incorporated into the formal regulated financial sector and must compete with other industries, this is seen as a strategic move to attract more users.

According to the industry on the 24th, three officially registered online investment-linked companies?8 Percent, Lendit, and PeopleFund?plan to develop or enhance their apps. ‘8 Percent’ plans to launch an official app within this year. A beta version has already been created, and internal employees are currently using the app to make corrections and improvements. Once revisions are complete, the official version will be updated and released in the second half of this year. In the case of ‘Lendit,’ although a concrete development blueprint has not yet been established, they explained that due to significant demand through mobile, the app will be released after some time.

Among online investment-linked companies, ‘PeopleFund’ is the only one providing services through an app and recently began app enhancement work. Since its launch in June 2019, the app has only offered investment functions, but they plan to add a loan section and newly introduce it in the third quarter. The goal is to improve user experience (UX) by enabling face-to-face loan contracts and document submission functions so that users can access services regardless of time and place.

Online Investment-Linked Companies Enhance Mobile Competitiveness to Capture Mid-Interest Rate Customers

Most P2P companies, including officially registered online investment-linked companies, have so far implemented services online and on mobile through web pages. Because their customer base was smaller compared to regulated financial institutions, they were able to attract users without an app. Unlike major banks aiming to be lifestyle platforms that require many functions, and funds that consider risk tolerance in investment methods, their services are simpler. Another reason is that the interface was designed to be easily accessible via mobile web pages, resulting in fewer consumer complaints.

The plan to develop and enhance apps is driven by competitiveness. Currently, online investment-linked companies must compete fiercely with internet-only banks and savings banks in the mid-interest rate loan market. Existing financial companies are already attracting customers by promoting convenient and simple loans through apps. To compete with large financial companies in lending, they concluded that they must keep up with the underlying infrastructure.

There is also an aspect of increasing customer touchpoints and expanding subscription channels. Most online investment-linked users already access services via mobile, and in the case of PeopleFund, the monthly active user (MAU) ratio on the app is about 1.5 times higher than on the web. An industry insider said, "After official registration, the revamped app will be able to absorb the rapidly increasing demand from financial consumers," adding, "Especially, the app usage frequency is expected to be high among customers in their 20s, who have a high mobile usage rate."