[Internet Banks 5 Years②] KakaoBank Eyeing Customers Up to Their 50s... K Bank Rushing in Heart Only

KakaoBank Targets Customers Up to Their 50s... KBank and TBank Rush but Lag Behind
KakaoBank Has 9.43 Million Customers Aged 20-39
More Than Half of Total Customers
Familiarity Appeals to Middle-Aged and Older Adults
40% of New Customers Are in Their 50s

KBank and TBank Attempt to Overtake but Fail to Narrow the Gap Significantly

KakaoBank, with nearly 10 million customers in their 20s and 30s, is accelerating its efforts to target middle-aged customers, thereby broadening its base. Meanwhile, K-Bank and Toss Bank are closely trailing KakaoBank, but the gap between them does not seem to be narrowing easily.

Capturing the 20s and 30s, Targeting the 50s

According to KakaoBank on the 23rd, as of the end of last year, the number of customers in their 20s and 30s reached 9.43 million. This accounts for more than half of KakaoBank’s total customers (17.99 million). Following its focus on younger customers, KakaoBank is expanding its customer base to middle-aged groups. It is analyzed that the familiar brand ‘Kakao’ is resonating well with middle-aged customers as well. According to KakaoBank, the number of customers in their 50s increased by about 37%, from 1.67 million in 2020 to 2.28 million last year. Customers aged 60 and above grew nearly 60%, from 480,000 to 760,000. Recently, about 40% of new customers are in their 50s. Yoon Ho-young, CEO of KakaoBank, said, “The influx of customers aged 50 and above is remarkable. The 20s and 30s use it, the 40s have joined, and now those in their 50s and older are connecting their financial lives through KakaoBank.”

KakaoBank’s popularity is attributed largely to its convenient user interface (UI) and the brand image familiarized through the national messenger KakaoTalk. In the early days, KakaoBank launched check cards featuring popular Kakao characters like Ryan and Apeach, which led many MZ generation (Millennials + Generation Z) customers to deliberately issue these check cards because of the characters. While traditional financial institutions have to attract customers through various events, KakaoBank grew its influence solely through its ‘characters.’ Kakao’s representative character ‘Ryan’ had such a powerful marketing effect that within Kakao’s corporate structure, the position of ‘Chief Ryan Officer’ was even created.

Seeing KakaoBank’s character effect, commercial banks have been rushing to adopt similar strategies. KB Financial Group and Shinhan Financial Group have targeted the MZ generation using their own characters, ‘Star Friends’ and ‘Sol Explorers.’ By using characters such as rabbits, bears, and ducks, they plan to break away from the stiff financial image and approach customers with a friendly image. KB Financial Group and Shinhan Financial Group are leveraging these characters in financial products and platform promotions to maximize marketing effects. A banking industry official said, “Now, the competitors for commercial banks are not each other but internet-only banks. Finding each company’s competitive edge to counter KakaoBank and others is the key issue.”

K-Bank and Toss Bank Chasing Behind

As KakaoBank expands its user base and grows in size, competition among internet-only banks has intensified with K-Bank and Toss Bank joining last year. However, as KakaoBank solidifies its position, K-Bank is falling behind in the competition, and although Toss Bank has entered the market, it has yet to demonstrate innovations that surprise the market.

The three companies show clear differences starting from their user bases. K-Bank’s customer count is 7.17 million, less than half of KakaoBank’s, which started business in the same year. Most of these customers were acquired last year through a partnership with the cryptocurrency exchange Upbit amid the cryptocurrency boom.

There are significant differences between KakaoBank and K-Bank in loans, deposits, and assets. As of last year, KakaoBank’s loan balance was 25.8614 trillion KRW, about 3.5 times that of K-Bank’s 7.09 trillion KRW. During the same period, deposit balances were also nearly three times different, with KakaoBank at 30.0261 trillion KRW and K-Bank at 11.32 trillion KRW. KakaoBank’s total asset size was more than twice that of K-Bank. According to the Financial Supervisory Service’s disclosure as of September last year, KakaoBank’s total assets were about 35 trillion KRW, while K-Bank’s were around 14 trillion KRW.

Toss Bank, launched in October last year, faced challenges immediately after its debut. It gained popularity by offering 2% interest on deposits without conditions and low-interest personal credit loans, attracting 1.2 million subscribers on the first day alone. However, due to the financial authorities’ household loan volume regulation policy, it had to completely halt new loans, including credit loans, overdraft accounts, and policy financial products such as Saetdol loans and emergency loans. Although it resumed household loans and launched loans for individual business owners this year, fierce competition is expected as all internet-only banks are vying for market share. Since the Toss application has 20 million subscribers, Toss Bank is expected to focus on maximizing inflow through Toss and increasing high-value transactions.