[Seungseop Song's Financial Light] Toss Bank's Launch Imminent... What Is the Secret Behind the Surge of Applicants?

Finance is difficult. It is filled with confusing terms and complex backstories intertwined. Sometimes, you need to learn dozens of concepts just to understand a single word. Yet, finance is important. To understand the philosophy of fund management and consistently follow the flow of money, a foundation of financial knowledge is essential. Accordingly, Asia Economy selects one financial term each week and explains it in very simple language. Even those who know nothing about finance can immediately understand these 'light' stories, lighting a bright 'fire' of financial insight.

[Asia Economy Reporter Song Seung-seop] Toss Bank has announced its launch in October. They have been accepting pre-registrations weeks in advance, with hundreds of thousands waiting. Internet-only banks and existing financial companies are also watching closely. What is the reason Toss Bank has attracted attention from the industry and customers even before its launch?

The strength of Toss Bank, as cited by the industry, is its vast financial data. Its parent company, Toss, started in 2013 as a fintech company providing simple remittance services. As of July, the cumulative number of users reached 20 million, and the total remittance amount reached 164 trillion won. The monthly active users (MAU) who consistently access the service are around 11 million.

The personal financial data accumulated over several years has infinite utilization value. It forms the basis for offering competitive interest rates and limits on various products such as credit loans and jeonse (key money deposit) loans in the future. Hong Min-taek, CEO of Toss Innovation Preparation Corporation, said at an online press conference held in June, “Toss has secured the most financial data across the entire financial sector, not only from existing banks, over the past six years,” adding, “By utilizing non-financial data such as telecommunications, we will enable middle- and low-credit borrowers who previously could not get bank loans to borrow money at appropriate interest rates.”

Toss’s ‘one-app’ strategy has also been widely praised. When Toss expanded into insurance and securities, it did not launch separate applications. This avoided the inconvenience of customers having to install another app to use new services. Toss Bank, launching next month, will also be accessible through the existing Toss app. This is to allow potential Toss Bank customers to receive financial services without any additional effort.

Some also point to Toss’s organizational culture and performance evaluation methods. Toss is known for offering its employees and newly joined experienced staff exceptional stock options and salary increase conditions. Recently, it posted job openings for about 100 people, offering industry-leading compensation and up to 1.5 times the salary compared to previous workplaces.

High Loan Limits and Deposit Interest Rate '2% Unconditionally'

The unprecedented benefits caught customers’ attention. The interest rate for credit loans announced on Toss Bank’s website ranges from 2.76% to 15% per annum. The loan limit is up to 270 million won. Considering that recent commercial banks have reduced credit loan limits to within annual salary and interest rates can reach up to 4%, these are considered favorable conditions. Users must have been employed at their current job for more than three months and have a verified annual income of over 10 million won.

For deposit products, Toss Bank declared it will pay 2% interest per annum 'without any conditions.' There are no restrictions on subscription period or deposit amount. If you open an account through pre-registration, interest at 2% per annum will be calculated from the date the money is deposited and paid monthly.

The card provided by Toss Bank also has no special performance conditions. It is said to offer reasonable benefits tailored to customers’ consumption patterns each season.

Toss Bank began accepting pre-registrations on the morning of the 10th, surpassing 300,000 applicants in less than a day. By the morning of the 13th, it exceeded 500,000, increasing at a rate of 7,000 people per hour. The number of Toss Bank applicants surpassed 700,000 last week.