[1mm Financial Talk] 'Capture the Future Generation'... Banks Targeting Infants and Young Adults

Various Products Launched to Expand Customer Base
Private Banker Teams, Traditionally Serving High-Net-Worth Clients, Now Focused on Millennials and Generation Z

Banks are increasingly targeting minors and young adults. Traditionally, customers in their 50s and 60s, who tend to hold the most assets, have been considered the most important clients for banks. However, the recent shift to significantly younger target demographics is seen as a strategy to secure future customers. Since banks generally offer products with few distinguishing features, customers who join rarely leave, making this a strategic move to lock in potential clients early.

According to the financial sector on June 18, Shinhan Bank recently launched a platform called "Cheoeum Crew," which brings together financial products for customers in their 20s and 30s. This platform is designed to help young customers, especially those just starting their careers and beginning to use major financial products, build assets. It offers a range of group products tailored for young people, including bank savings, credit and debit cards, securities ISAs, and insurance.

Hana Bank has also introduced various events to attract first-time minor customers. Until July 6, parents with children under the age of 18 who open accounts in their child's name?including checking, savings, housing subscription savings, or foreign currency accounts?will receive prizes and a "20,000 Hana Money Accumulation Voucher," among other incentives.

The "MG Dream Tree Savings" account, a children's savings product from Saemaeul Geumgo, sold more than 55,000 accounts in just two days. The original goal was to sell 10,000 accounts, but on the launch day alone, more than 23,000 were sold, prompting a one-day extension and resulting in a final total of 55,030 accounts. The product's popularity is attributed to its rare preferential interest rate of 6.0% per year, at a time when most savings products offer rates of just 1-2%.

In addition, banks are actively providing financial education for future customers. Hana Bank has been hosting the economic musical "Jack's Magic Wallet" for 18 consecutive years to help foster sound financial habits among the next generation. BNK Busan Bank has also introduced a program allowing parents and children to receive financial education together remotely.

Banks are not only launching financial products for younger customers but are also strengthening their teams of private bankers (PBs) from the MZ generation (Millennials and Generation Z). Traditionally, PBs serve wealthy clients and are selected for their expertise and customer service experience. However, with the rise of the "young rich," Shinhan Bank has been recruiting younger PBs, including deputy managers born in the 1990s, since 2022. Woori Bank is also nurturing young PB talent by selecting employees in their 30s through its next-generation PB fast-track program.

This focus on younger customers by banks is aimed at expanding their customer base. A banking industry insider commented, "Even though it does not significantly improve profitability, banks have been fiercely competing to win bids for the Nara Sarang Card in order to secure young customers who will become future clients. Since banking products are largely similar, customers acquired in this way are unlikely to leave, so banks across the industry are concentrating their efforts on expanding their customer base."