Bank Apps Expanding to Delivery, Budget Phones, and Music... The Era of Financial 'Big Blur'

Expansion of Non-Financial Services from Toss to Commercial Banks
"Platform-Centered Management Culture Change Also Needed"

[Asia Economy Reporter Minwoo Lee] Financial companies are expanding their services into non-financial sectors such as delivery, MVNO (Mobile Virtual Network Operator), and music streaming. This strategy is interpreted as an effort to increase customer touchpoints using lifestyle-oriented services and to seek various synergistic effects.

According to the financial sector on the 25th, Viva Republica, which operates the comprehensive financial platform 'Toss,' recently signed a contract to acquire 100% of the shares of the MVNO operator 'Merchant Korea.' The acquisition price is known to be in the 10 billion KRW range. Following last year's acquisition of the mobility company 'Tada,' this is another acquisition outside the financial sector. It appears to be aimed at increasing customer contact points and seeking synergy with the financial sector in the future. In the long term, it is expected to help further refine Toss's credit evaluation system by utilizing communication bill payment records and mobile phone usage information.

Commercial banks are also focusing on non-financial areas. KB Kookmin Bank and Shinhan Bank are particularly active. Kookmin Bank entered the MVNO business early. After launching the MVNO service 'Liiv M' in October 2019, it has already secured more than 300,000 subscribers. They are attracting MVNO users as bank customers by offering Liiv M exclusive products such as the 'The Ju-neun Liiv M' savings account.

Shinhan Bank launched the delivery order application 'Ttaenggyeoyo' in January, becoming the first financial company to do so. The service is currently available throughout Seoul, Bucheon City in Gyeonggi Province, and four districts in Busan. According to the big data platform company Mobile Index, the monthly active users (MAU) of 'Ttaenggyeoyo' increased from 18,400 in its official launch month of January this year to 157,300 in June. Related products have also been actively launched, including the 'Ttaenggyeoyo Savings Account,' 'Ttaenggyeoyo Business Loan' for individual merchants, and a Ttaenggyeoyo-exclusive credit card. Furthermore, on the 8th, Shinhan Bank partnered with KT to launch an MVNO plan. The strategy is interpreted as not only attracting users but also securing various data such as restaurant owners, consumers, and communication fees to develop related financial products.

Additionally, Hana Bank and Woori Bank are also focusing on non-financial services. Hana Bank recently launched the music streaming service 'Hana Music Box' through a partnership with Genie Music, allowing free music listening on the Hana One Q app. Woori Bank is concentrating on convenience stores, offering services such as convenience store parcel reservations and convenience store product order delivery.

Senior Research Fellow Bonseong Koo of the Korea Institute of Finance advised, "Domestic banks facing competition from big tech companies need to enhance their competitiveness by integrating consumption, distribution, and finance into complex services, expanding customer influence through digital marketing, and expanding services targeting the new generation." He added, "It is necessary to expand into functional financial platforms encompassing both financial and non-financial services, and to transform platform-centered management culture and organizational structure."