Following Naver, KakaoPay Launches
Aiming for First-Mover Advantage as an Information Service
Recommendation and Brokerage Expected to Start Around December
Major Card Companies Also Preparing Interest Rate Comparisons
Banks Cautious of 'Portal Dependency'
"What is the maximum interest you can earn by depositing 30 million KRW for 12 months?"
The highest interest rate is 4.15% per annum, with interest earned amounting to 1,053,270 KRW.
Kakao Pay launched an interest rate comparison service for savings and time deposits on the 13th. Users can set deposit amounts ranging from 5 million to 100 million KRW to search for interest rates. The Financial Supervisory Service provides information on 600 savings and time deposit products from banks, which is processed and displayed in the app for easy viewing. Banks are ranked by highest interest rates, and by tapping on a bank, users can see the calculated interest amount and proceed directly to the bank’s website to sign up.
Jung Da-woon (28), who has used this service, said, "Savings and time deposits are popular during the interest rate hike period, and since the interest rate information is well organized, I think I will check it often." She added, "I heard that savings banks offer higher interest rates on time deposits, but I hadn’t really looked into it until now. Since it appears at the top, accessibility has improved."
From Big Tech to Card Companies: Savings and Time Deposit Comparison
Following Naver Financial, Kakao Pay has also entered the savings and time deposit interest rate comparison service market, creating a sense among banks and the financial sector that "what was expected has arrived." Although currently only providing information, if designated as an innovative service by the Financial Services Commission as early as December this year, it will also offer product recommendations and brokerage functions. A Financial Services Commission official said on the 14th, "It appears that big tech companies launched the service as a beta to gain a first-mover advantage."
Banks’ biggest concern is that while banks create the products, big tech companies take over sales. Above all, there is worry that big tech will take control of customer information and product leadership, leading to banks becoming dependent on big tech.
Major card companies are also preparing this service. A senior financial official said, "Including financial holding company card affiliates (Shinhan, KB Kookmin, Woori, Hana Card, etc.) and card companies offering MyData services, they plan to jointly apply to the Financial Services Commission for an innovative savings and time deposit interest rate comparison service." He added, "They can mediate savings and time deposit products to consumers and also introduce investment products, while generating new revenue from banks through advertising or brokerage fees."
Banks Fear Losing Control
The primary stakeholders to be most affected are commercial banks, but they are unable to respond effectively because creating their own savings and time deposit interest rate comparison sites could lead to losing customers to competitors. Even looking at fixed deposit interest rates, most places offering over 4% are savings banks. A commercial bank official said, "For the five major banks (KB Kookmin, Shinhan, Hana, Woori, NongHyup) to create an interest rate comparison site is like displaying cheaper products from other stores in my own shop and asking customers to choose."
Kim Kwang-soo, chairman of the Korea Federation of Banks, said, "With the opening of savings and time deposit interest rate comparison sites, existing business areas are being completely disrupted. We should not only consider convenience brought by digitalization. Financial stability is important, and we will discuss this with banks."
Meanwhile, the secondary financial sector, such as savings banks, is expected to benefit from this situation. They will increase customer contact points through platforms created by big tech and card companies, and their interest rates are higher than those of the primary financial sector. A savings bank official said, "It has been difficult to increase accessibility even with advertising, but once the platform is created, the competitiveness of savings and time deposit products will improve." He added, "Deposits up to 50 million KRW are protected, so the number of incoming customers is expected to increase."
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