15% of MZ Generation Using Kakao Bank Plan to "Change Their Main Bank"
Research Institute Says "Commercial Banks Must Also Strengthen Platform Competitiveness"
[Asia Economy Reporter Lee Kwang-ho] The MZ generation (Millennials + Generation Z), which has rapidly emerged as the "economic main force," considers KakaoBank the most important financial service provider. Additionally, big tech companies (large information technology firms) have established themselves as indispensable financial service providers in the daily lives of the MZ generation, with Naver Pay being regarded as a more important financial institution than traditional banks.
According to the report "The Need to Expand Collaboration Between Big Tech and Banks" released on the 16th by Hana Financial Management Research Institute, the most important financial institutions according to the MZ generation (based on the combined ranking of 1st, 2nd, and 3rd choices) were KakaoBank at 43.8%, followed by Naver Pay at 38.2%, and traditional banks at 37.7%. This means that 8 out of 10 MZ generation individuals consider big tech companies as their primary financial payment method over traditional banks.
In fact, the number of big tech users is rapidly increasing. As of the end of the third quarter, the monthly active users of the KakaoBank mobile application exceeded 14.7 million, making it the largest in the entire banking sector. The number of customers increased from 15.44 million at the end of last year to 17.4 million as of the end of September this year. The number of users of Naver Pay, K Bank, Toss Bank, and others is also rapidly growing.
Most of these generations use both traditional banks and internet-only banks as their main banks. Among all respondents, 79.4% reported using both traditional banks and internet-only banks. Only 20.0% of the MZ generation use traditional banks exclusively, and just 0.6% use only internet-only banks.
KakaoBank Users Among MZ Generation, 15% Plan to "Switch Main Bank"
Kim Ji-hyun, a research fellow at Hana Financial Management Research Institute, predicted, "Although the proportion of traditional banks as the main bank for the MZ generation remains high, the use of internet-only banks is expected to increase in the future." It is anticipated that traditional banks will be used mainly for salary accounts, internet-only banks for inquiries and transfers, and fintech services for remittances, payments, events, and promotions.
Among the MZ generation currently using KakaoBank (70.2%), 15.8% stated they plan to switch their main bank to KakaoBank. Meanwhile, 52.8% responded that they are split evenly.
The research institute advised that since the convenience and simplicity of big tech services may lead to a shift in usage in the future, traditional banks should focus on strengthening their own platform competitiveness.
Researcher Kim suggested, "Banks should strengthen their own platforms while continuing marketing collaborations with big tech companies, and consider competitive and cooperative strategies with big tech by establishing new collaborative revenue models using Banking as a Service (BaaS) and other means."
He added, "Although domestic BaaS-related financial services are still at a minimal level, it is necessary to review business models for securing fee models, attracting big tech and fintech customers, and expanding partnerships across different industries."
Shinhan Bank plans to support non-face-to-face financial services for small and medium-sized enterprises through strategic equity investment in Douzone Bizon. They plan to launch BaaS-based corporate loan specialized products and services for employees within this year.
A Shinhan Bank official said, "We will continuously introduce integrated products that maximize convenience and benefits from the customer's perspective."
Woori Bank also plans to promote digital partnerships across different industries through BaaS.
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