[Exclusive] KB and Shinhan Year-End Certificate Competition, Defeated by Naver and Kakao

Bank Private Certificates at 1% Level
Big Tech Companies 14 Times Higher
Accessibility and Usability Divide Outcomes

It has been revealed that banks performed poorly in the competition for private certificates for year-end tax settlement against big tech companies such as Naver and Kakao.

According to the usage status of certificates on the National Tax Service's Hometax from January 15 to 31, obtained through the office of Han Junho, a member of the Democratic Party of Korea, out of a total of 77.62 million cases, private certificates issued by banks accounted for only about 1%, totaling 760,000 cases. The number of uses of KB Mobile Certificate was 660,000, and Shinhan Bank had 100,000 cases.

KB Kookmin Bank, which proactively introduced private certificates in the banking sector, provided its second service this year following last year's year-end tax settlement, but the number of uses remained the same at 660,000 cases as last year. Although the number of issuers of the KB Mobile Certificate reached 9.6 million, its use for year-end tax settlement was minimal.

The number of certificate uses by big tech companies such as Kakao and Naver was about 14 times higher than that of banks. Kakao's certificate usage reached 9.79 million cases, a 66% increase compared to 5.91 million cases last year. Naver Certificate, introduced for the first time in this year's year-end tax settlement, recorded 1.22 million cases. Other private certificates usage included PASS from the three major telecom companies with 2.79 million cases, Samsung Pass with 80,000 cases, and Payco with 60,000 cases.

The use of the former public certificate (joint certificate and financial certificate) remained high at 81.1%, but it showed a decreasing trend compared to last year's usage rate of 90%. Joint certificate usage was 61.46 million cases, and financial certificate usage was 1.46 million cases. The usage rate of private certificates increased to about 20%.

Year-end tax settlement is considered a sector where private certificates of companies can grow significantly in a short period. If adopted in the year-end tax settlement service used by the majority of the public, there is a high possibility of securing long-term users. Banks also regard the private certificate business as important for utilizing financial services and attracting platform users. A banking sector official explained, "Certificates are the gateway to digital finance and also help in acquiring customer data." For big tech companies, private certificates are a market they must capture. If essential services such as payments and certificates are used based on Naver and Kakao platforms in daily life, they can expect a ‘lock-in effect’ that keeps users tied to their platforms.

The poor performance of banks' private certificates seems to be due to accessibility and usability still lagging behind platform companies. Many people use KakaoTalk and Naver apps, which often do not require separate installation, but to issue a bank private certificate, users who are not already customers must go through a separate app download process. Moreover, the certificate issuance process in banks is more complicated compared to big tech companies. For example, to get a KB Mobile Certificate, users must enter their name, resident registration number, and phone number, and even take a photo of their ID card, whereas KakaoTalk Certificate can be issued with just identity verification followed by an account confirmation process. An IT industry official said, "Even one additional small step can cause users to feel inconvenienced and avoid the service," adding, "Platform companies put a lot of effort into reducing even one step, so there is inevitably a significant convenience gap compared to banks."