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No More Innovation in Kakao Bank

NSP NEWS AGENCY, By eunyoung Huh Journal, 2022-09-15 19:16 END8
#Kakao Bank #Innovation

(Seoul=NSP News Agency) eunyoung Huh Journalist = A new rumor about Kakao Bank, one of major direct banks in Korea, is spreading in the financial industry -"There's no more innovation at Kakao Bank."

Kakao Bank has emphasized that its innovation will get more customers to use its service more. However, the innovation is losing its momentum as the users find it in the name only.

Also, Kakao Bank's act of handing its customers' mortgage files over to its subcontractor has brought another big concern to the customers over the leakage of personal data.

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Even though Kakao Bank released a 'complete non-face-to-face' mortgage service in the market; customers still had to submit files in-person for the right to establish collateral security and the registration of ownership transfer. It was not a complete non-face-to-face service at all for the users.

Moreover, Kakao Bank is losing its competitive edge as other banks are marketing services similar to those developed by Kakao Bank such as not charging ATM(Automated Teller Machine) remittance fee and not requiring joint certificate authentication which the company have put forward since its establishment.

Despite the Kakao Bank’s advance into a new business, credit card companies expressed skepticism, saying it’s already hard to find innovation in the credit card industry because no more consumer use one credit card, but they prefer to use multiple cards to pick financial benefits they want.

Kakao Bank's interest income in the first half of this year was KRW 417.9 billion, up 54.1 % from the same period last year, but its non-interest income was KRW 17 billion, down 32.3%. This means that Kakao Bank’s earnings from other businesses - not from spread between deposits and loans - have been on the decline.

Innovation comes from partnerships with businesses in other industries by launching an array of various services. But it seems Kakao Bank is taking an opposite path from innovation.

Despite the situation, Kakao Bank expressed its will to challenge for innovation saying,"Our portfolio has been consisted of home mortgages to date, but we have a plan this year to advance into corporate finance by launching financial services for individual businesses since we have enough capacity to start a new business."

NSP News Agency eunyoung Huh Journalist eunyoung114@nspna.com
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