Innovative Financial Service Officially Institutionalized on the 16th
Card Companies Respond to Online Deposit Brokerage Business
Woori Card Joins Following Lotte Card
Card companies are increasingly entering the online deposit brokerage business, which the government has officially institutionalized as an innovative financial service. Following Lotte Card, Woori Card is also confirmed to plan to launch the service within this year.
According to the financial sector on the 17th, Woori Card is preparing an online deposit brokerage service. It is currently undergoing additional condition review procedures related to innovative financial services at the Financial Supervisory Service. The company stated, "Our goal is to launch the service within this year."
Woori Card plans to compare and recommend deposit and savings products from various financial companies through its application (app) 'Woori One Card.' They are also working on enhancing their business portfolio and business model.
Woori Card's strategy is to target market niches dominated by big tech companies such as Naver Financial and Kakao Pay. They expect to launch the service without additional procedures once they pass the Financial Supervisory Service's review. The registration requirements for the online deposit brokerage business include having specialized personnel and completing representative education.
On the same day, Lotte Card also announced that it has started preparing for the deposit brokerage service. They plan to provide deposit and savings comparison services through the 'DigiRoka' app.
Lotte Card declared its transition to a digital company starting in 2022. Under the slogan of becoming a 'Curating Digital Company' that recommends optimized content to customers in advance, they are promoting this business.
A company official said, "We have set a policy to become a curating digital company through hyper-personalized services centered on the DigiRoka app, and the online deposit brokerage business is also being prepared as part of our digital transformation vision."
The online deposit brokerage business was designated as an innovative financial service by the Financial Services Commission in 2023 and was piloted for two years before being officially institutionalized on the 16th after two years. Currently, four companies?Naver Financial, Kakao Pay, Toss, and Shinhan Bank?are operating in this sector.
The Financial Services Commission plans to institutionalize the service through related legal amendments in the first half of the year. Starting next month, brokerage of demand deposit products (parking accounts) will also be permitted.
Card companies had been reluctant to participate in the business due to low market deposit interest rates. However, with the Financial Services Commission allowing brokerage of demand deposits, they judged that the related market could expand. Woori Card and Lotte Card see sufficient business potential and have taken proactive measures.
Additionally, seven other card companies are considering entering the market. A Samsung Card official said, "We received approval for deposit brand comparison and recommendation services as an innovative financial service from the Financial Services Commission in 2023 and plan to review it according to market conditions." Shinhan Card is considering adoption but has not set a specific schedule. BC Card, NH Nonghyup Card, and others, which are accelerating AI-centered digital transformation, are also reviewing it but have not yet made concrete plans to participate in the business.
Meanwhile, card companies are feeling limitations in their revenue structure focused on credit sales and are putting their lives on discovering new businesses. Although loan businesses such as card loans are highly profitable, the high delinquency risk makes securing new businesses urgent.
Last month, Samsung and Shinhan Card specified participation in corporate information inquiry business in their articles of incorporation at their regular general meetings. BC Card received the main license last year.
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