[1mm Financial Talk] Young Adults Are Main Customers... Inbaeng Does Not Participate in Youth Leap Account

Although major commercial banks are reportedly participating in the 'Youth Leap Account,' one of the key pledges of the Yoon Suk-yeol administration, internet-only banks are opting out. The 'Youth Leap Account,' expected to launch in June, is a product targeted at young people aged 19 to 34, allowing them to accumulate a lump sum of 50 million won by depositing 700,000 won monthly for five years.

According to financial sources on the 30th, internet-only banks such as Kakao Bank, K Bank, and Toss Bank have decided not to handle this product. As internet-only banks primarily serve customers in their 20s and 30s, their absence from this policy financial product for youth has drawn criticism from commercial banks.

Internet-only banks collectively cited difficulties in implementing certain face-to-face-required processes, such as verifying household income below 180% of the median and handling special early termination procedures, within a non-face-to-face system as reasons for their non-participation. For similar reasons, internet-only banks also did not handle the 'Youth Hope Savings,' a policy financial product offering up to a 10% interest rate benefit last year. A representative from a commercial bank criticized this stance, saying, "While promoting that even more complex products like mortgage loans can be implemented non-face-to-face, it seems contradictory for internet-only banks, which claim to be technology banks."

Although internet-only banks publicly explain their non-participation as due to limitations of non-face-to-face systems, some view it as reluctance to bear the associated costs. In the case of the Youth Leap Account, although the government provides budget support, it is a high-interest product, meaning banks must absorb some costs. Banks, which profit more from larger interest rate spreads between loans and deposits, face burdens when high-interest deposits increase.

There is also the issue of server costs. Last year, when many applicants rushed to sign up for the Youth Hope Savings at once, errors occurred in bank apps. Such situations are critical for internet-only banks that operate solely through apps. A representative from an internet-only bank said, "Building additional servers would require significant manpower and costs." Consequently, there are criticisms within the financial sector that internet-only banks only engage in activities that help their sales or profits and avoid sharing the burdens related to financial authorities' policies.