Reasons Behind the Successive Launch of Unique Products Like Gulbi and Choeae Savings Accounts

Inbaeng, Increasing Product Uniqueness and Applying High Interest Rates
Expanding Customer Base through Deposit Acquisition Efforts

Internet-only banks are consecutively launching unique savings and deposit products. The intention is to diversify deposit products to accelerate customer acquisition while preventing the outflow of deposit funds.

KakaoBank launched a fandom-based service called ‘Choeae Jeokgeum’ (Favorite Savings) on the 18th. This product saves a certain amount every time the favorite ‘Choeae’ star performs a specific action. It is the first service of KakaoBank’s new deposit product, the Record Account. For example, if a favorite singer uploads a photo on social networking services (SNS), 1,000 KRW is saved; if they appear on a variety show, 10,000 KRW is saved. Users can decorate their accounts with favorite photos and share their savings status with others. The interest rate for this product is 2.0% per annum, and even saving for just one day applies the 2.0% annual interest.

Toss Bank launches Gulbi Savings Account. Photo by Toss Bank

Toss Bank also launched the ‘Gulbi Jeokgeum’ (Dried Yellow Croaker Savings) on the 12th of this month, reflecting the saving trend. It is optimized for small-scale financial management with an initial subscription amount of 0 KRW and a monthly deposit limit of up to 300,000 KRW. The subscription period is 6 months, with an annual maximum interest rate of 5.0% (basic interest rate of 2.0% plus a preferential interest rate of 3.0%). The preferential interest rate is automatically applied if the account is maintained without early termination until the 6-month maturity. Each time a customer deposits into the savings account, the product screen shows a dried yellow croaker hanging from the ceiling gradually moving to a dining table on the floor, making saving fun. Toss Bank also launched the ‘Interest-Earning Time Deposit’ last month, which provides 3.5% interest immediately upon subscription. This product emphasizes differentiation from commercial banks that pay interest at maturity but was also caught up in liquidity crisis rumors.

These products are attracting customers and continuing their popularity. The ‘Choeae Jeokgeum’ attracted 400,000 customers within ten days of the pre-registration starting on the 7th of this month, and the ‘Gulbi Jeokgeum’ exceeded 56,000 cumulative accounts just two days after its launch. The ‘Interest-Earning Time Deposit’ also gathered over 600 billion KRW despite liquidity crisis rumors.

Internet banks are strengthening deposit products because they see them as a key means of acquiring customers. Internet-only banks have the characteristic that customers can easily switch due to the simple procedures for canceling and subscribing to savings and deposits. As a result, deposit balance acquisition is also being achieved steadily. The savings deposits of the three banks?KakaoBank, K Bank, and Toss Bank?have steadily increased from 24.767 trillion KRW in March last year to 25.462 trillion KRW in June, 26.8704 trillion KRW in September, and 27.6288 trillion KRW in December. Toss Bank and others plan to turn profitable in the second half of the year through aggressive customer expansion.