NSP Report Toss Bank’s Unilateral Reduction in Customer Benefits, ‘Breaking Confidence’
NSP NEWS, By eunyoung Huh Journal
END8, Read 0(서울=NSP통신) eunyoung Huh Journal = Toss Bank, a Korean direct bank, is losing confidence from its customers as it repeatedly reduced various kinds of benefits which had given to clients.
Toss Bank has strengthened requirement on the cashback payment and reduced the limit. By doing so, Toss Bank removed one-third of the customer benefit. The bank was also able to avoid financial authorities’ regulation by registering the cashback service as an ‘event’, not as an ‘additional service.’
Furthermore, ‘an annual 2% interest rate of money market deposit account without conditions,’ Toss Bank had put forward as an exceptional offer, came with a new condition attached - ‘0.1% interest rate for the accounts with KRW 100 million or more in deposit’ - since it was released two months ago. Also, Toss Bank reduced benefits for installment savings accounts as well 4 months after it was released.
Toss Bank has strengthened requirement on the cashback payment and reduced the limit. By doing so, Toss Bank removed one-third of the customer benefit. The bank was also able to avoid financial authorities’ regulation by registering the cashback service as an ‘event’, not as an ‘additional service.’
Furthermore, ‘an annual 2% interest rate of money market deposit account without conditions,’ Toss Bank had put forward as an exceptional offer, came with a new condition attached - ‘0.1% interest rate for the accounts with KRW 100 million or more in deposit’ - since it was released two months ago. Also, Toss Bank reduced benefits for installment savings accounts as well 4 months after it was released.
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In general, banks are setting the maximum number of emergency withdrawal from the installment savings accounts as 0 to 1; however, that of Toss Bank is 6. Against this backdrop, the Bank of Korea created a guideline to limit the number of partial termination of installment savings accounts up to 3 times before the maturity date, taking into consideration a fairness among other financial corporations; and Toss Bank has accepted.
Customers of Toss Bank criticized about this Toss Bank’s behavior saying, “Such flip-flopping in pursuit of a short-term performance will only give a negative impact to customers.” An official of the Financial Supervisory Service also blamed that “Making it hard for customers to know is, in fact, a mean behavior.”
On the other hand, Hong Min-taek, CEO of Toss Bank, said in June this year, “It is true that our innovation is lagging behind other banks. But providing what customers want is the most basic thing that we must do utmost.” What Toss Bank should do to this end would be to have a multilateral perspectives and deliberately review to put the consistency and sustainability of all customer benefits before ‘innovative’ benefits.
On the other hand, Hong Min-taek, CEO of Toss Bank, said in June this year, “It is true that our innovation is lagging behind other banks. But providing what customers want is the most basic thing that we must do utmost.” What Toss Bank should do to this end would be to have a multilateral perspectives and deliberately review to put the consistency and sustainability of all customer benefits before ‘innovative’ benefits.
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