[1mm Financial Talk] Financial Sector Targeting Teens... Cashback, Deposits and Transfers Without Accounts

#Middle school student Lee Hyeri (15) has recently become fond of earning 100 won cashback. She mainly uses K-Bank's 'High Teen Card' to make payments at convenience stores and earns 100 won cashback each time. By gradually accumulating, she has saved 1,300 won this month alone, managing her allowance. Recently, banks have been focusing on targeting teenagers and even the 'Alpha Generation' (born after 2010) by launching products aimed at them. The Alpha Generation is a generation born into a low birthrate and aging society and has even received allowance management education. Hana Financial Research Institute analyzed the 'Alpha Generation' as a generation that manages their own money, called 'Naedonnaegwan' (managing my own money). This means they earn and manage money themselves through applications (apps), social networking services (SNS), and games. Because of this, competition among banks to capture the Alpha Generation has been intensifying this year.

According to K-Bank on the 29th, new sign-ups for the 'High Teen Card' targeting teenagers recently increased by 20% compared to last month, and card approval amounts also rose by 35%. The High Teen Card is a prepaid service exclusively for teenagers, offering up to 2,000 won cashback per month. A K-Bank official said, "Teenagers also receive financial benefits and can develop proactive allowance management habits, so the response has been positive."

In the case of KakaoBank, it proactively targeted teenagers to establish its position. In October 2020, it launched 'KakaoBank Mini,' the first bank service exclusively for teenagers, targeting those aged 14 to under 18, allowing deposits and transfers even without a bank account. KakaoBank is currently considering lowering this age limit to target the Alpha Generation. A KakaoBank official said, "We aim to expand the age range within the first half of the year." The cumulative number of 'Mini' subscribers has reached 1.68 million.

Hana Bank and Toss have also expanded their customer base to include those under 14 years old. Hana Bank launched the 'I Buja' app and a prepaid rechargeable card called the 'I Buja Card' that children under 14 can use. Toss provides the 'Youth Toss' service, allowing elementary school students aged 7 to 14 to sign up and use remittance and recharge services. The 'Toss Youth Card' can be applied for by those aged 7 to 16 and can be used until age 19. In particular, Toss is also focusing on educational content to ensure that financial education and daily life naturally continue into adulthood.

Banks are targeting the Alpha Generation to secure future potential customers. In fact, 90% of KakaoBank 'Mini' users open KakaoBank accounts once they turn 17 or older, when they receive their resident registration cards. A financial industry official said, "If we retain them, they can naturally become users, and locking in potential customers in the long term is important for securing future competitiveness."

Photo by Youth Toss Service capture