[Exclusive] "Let's Switch to Even Cheaper Options"… Seven out of Ten Choose Online Loans [Savings Banks Cornered]③

Changed Savings Bank Business Environment
70% of Personal Loans Through Comparison Loan Platforms
Conversely, Number of Savings Bank Loan Recruiters Decreases
"Higher Dependence Leads to Reduced Interest Margin"

Jung Mo, a man in his 50s who works at a company and holds a savings bank credit loan with an annual interest rate of 19.8%, is frequently accessing comparison loan platforms to explore refinancing options. As his retirement approaches but his debt continues to grow, he is looking for low-interest products. He said, “In the past, I used to inquire about loans through phone consultations, but nowadays everything is online. Everyone around me also checks and applies online.”

It has been revealed that 70% of savings bank credit loans are issued through online comparison loan platforms. Previously, savings banks heavily promoted their loans via cable TV advertisements, internet ads, or loan solicitors, but now customers visit comparison loan platforms to find out where the lowest interest rates are and choose the lowest rate available. Due to the high dependence on platforms and intensified interest rate competition among savings banks, concerns are rising that the business environment will worsen further.

According to the ‘Comparison Loan Platform Market Share Status’ data obtained by Asia Economy from the credit rating industry on the 9th, the proportion of new savings bank credit loans using comparison loan platforms was recorded at 69.7% as of last August. Out of a total of 1.2943 trillion KRW in credit loans handled by the savings bank industry in one month, 902.3 billion KRW was issued through comparison loan platforms. This is the first time that the specific usage amount and market share of comparison loan platforms have been disclosed.

The use of comparison loan platforms for savings bank credit loans is rapidly increasing. In 2022, more than half, 53.3%, of credit loans were obtained through comparison loan platforms, and last year this rose by 7 percentage points to 60.3%. Furthermore, in August of this year, the platform usage share increased by an additional 9.4 percentage points.

Choi Byung-ju, Senior Executive Director of the Korea Federation of Savings Banks, also diagnosed at the ‘2025 Economic and Financial Outlook Seminar’ held on the 12th of last month that “Personal credit loans are mostly conducted non-face-to-face as big tech (large information technology companies) comparison loan platforms have become very active.”

Yonhap News

Conversely, the number of loan solicitors in the savings bank sector continues to decline. According to the Korea Federation of Savings Banks, the number of loan solicitors contracted with savings banks was recorded at 1,310 as of October. In the first quarter of 2022, there were as many as 2,890, but within a year, half of the loan solicitors left the savings bank industry, decreasing to 1,995 in the first quarter of last year and further down to 1,443 by the end of last year.

As a result, concerns are emerging within the savings bank industry that excessive interest rate competition on comparison loan platforms could reduce profit margins. In the past, savings banks increased brand awareness through marketing such as advertising and sports sponsorships and attracted customers through loan solicitors, making real-time interest rate comparisons across all financial companies difficult. Therefore, even if loan interest rates were set similar to or slightly higher than other financial companies, they could still earn interest income. However, with the advent of comparison loan platforms, where interest rate competitiveness determines loan sales, net interest margins are shrinking, and in the worst case, reverse margins could occur.

A savings bank official said, “If a loan product with a slightly lower interest rate by a fraction of a percentage point is chosen on a comparison loan platform, borrowers benefit from increased interest rate advantages,” but added, “Each company will have to accept reduced profit margins or even reverse margins, which will significantly worsen their performance.”

Another savings bank official said, “The savings bank industry already has a high dependence on comparison loan platforms, and this is expected to increase further,” adding, “In such a situation of growing platform dependence, interest rate competition can only intensify.”