Banks Obsessed with 'Food and Convenience Store' Delivery: Good Initiative but Sustainability in Question

Banks Push for Comprehensive Platform Development... Foresee 'Showdown' with Big Tech
Shinhan Bank's 'Ttaenggyeoyo' and Woori Bank's 'My Convenience Store' Launched in Succession
Latecomers' Performance Uncertain... "Various Incentives Needed"

[Asia Economy Reporter Jin-ho Kim] Banks are increasingly entering the lifestyle service market, starting with delivery applications (apps). Having been on the defensive in competition with big tech companies (large information technology firms), banks are now signaling fierce battles on the platforms that serve as the main stage for these tech giants. Industry insiders evaluate this as banks taking their first step toward building comprehensive platforms, but some critics argue that there is little to attract consumers significantly.

According to the financial sector on the 20th, Shinhan Bank will launch a pilot service for its self-developed delivery app ‘Ttaenggyeoyo’ on the 22nd. Starting with six districts in Seoul?Gangnam, Seocho, Songpa, Gwanak, and others?the bank plans to secure about 80,000 affiliated stores across Seoul and Gyeonggi Province by the end of next year.

‘Ttaenggyeoyo’ is characterized by operating separately from Shinhan Bank’s existing financial platform ‘SOL.’ Unlike other banks’ lifestyle services, it runs as a standalone app, allowing even non-Shinhan Bank customers to use it conveniently, similar to Baedal Minjok or Coupang Eats.

Woori Bank also launched the ‘My Convenience Store’ service in partnership with convenience store chain Seven Eleven starting the same day. Customers can order Seven Eleven products worth more than 15,000 KRW from 11 a.m. to 11 p.m. and have them delivered to their desired location. This service was introduced to increase user engagement with the mobile banking app ‘Woori WON Banking.’

Kookmin Bank added a banner for the delivery app ‘Yogiyo’ on its KB Star Banking app. NongHyup Bank offers a flower delivery payment service called ‘All One Flower’ through its mobile banking app ‘All One Bank.’

The reason banks are embedding lifestyle services such as delivery into their apps or developing separate apps is analyzed as a response to the intensifying invasion by big tech companies like Naver and Kakao. There is a sense of crisis that if banks do not actively attempt to transform into comprehensive platforms, they may be relegated to mere subcontractors who only create financial products in the future.

In particular, non-financial data is cited as the reason banks are focusing on ‘delivery.’ It is interpreted as a strategy to accumulate a massive amount of non-financial data by providing delivery services that consumers use most frequently during the COVID-19 pandemic.

Based on the accumulated non-financial data, banks plan to strengthen existing financial services such as new loan products. Shinhan Bank intends to offer various financial services tailored to small business owners registered on ‘Ttaenggyeoyo,’ as well as to riders and users. In October, the bank already launched a dedicated loan product based on rider data from the delivery agency ‘Saenggakdaero’ affiliated with ‘Ttaenggyeoyo.’ A representative from a commercial bank said, "You can see this as the initial stage of building a comprehensive platform through the fusion of financial and non-financial services."

However, there is skepticism about how meaningful the results will be for banks entering the already saturated lifestyle finance service market as latecomers. While attempts to strengthen non-financial services to build comprehensive platforms are positively evaluated, concerns about sustainability remain.

Especially in the delivery app market dominated by large corporations like Baedal Minjok and Coupang Eats, there are concerns that Shinhan Bank’s ‘Ttaenggyeoyo’ could become as ineffective as public apps run by local governments if it lacks strong incentives to attract consumers. A representative from a commercial bank said, "The key ultimately lies in securing consumer convenience," and predicted, "Various incentives such as coupons and events will be prepared to activate the service."

Regarding Woori Bank’s ‘My Convenience Store’ service, there are criticisms that it is cumbersome because users must log in to the bank app to use it. This is because convenience store delivery services are already offered by all delivery companies.