(2017-10-18) Kakaotalk Bank

How a Messaging App Challenged Traditional Banks and Captured 45% of the Market – Counterpoint Research

Instant Messaging platform KakaoTalk has successfully entered the banking industry in Korea after obtaining a license from the regulator FSC in April this year. It was designated as one of the two online-only retail banks in the nation.

Within just 24 hours of opening on July 27th 300,000 new accounts were opened

It extended US$1.2 billion in credit loans during August and this again accounted for 40% of the country’s total loans during the month.

Opening a bank account only took 5-7 minutes on average and the only document required was a photo of your ID card

The ease of opening an account was not the only selling factor, KakaoBank also offered loans with interest rates that were as low as 2.86% compared to the 6-19% range of traditional banks. The approval process was also as quick and easy as the account opening.

The third factor was the low commission fee on overseas money transfers. The rate offered was as low as US$5 which is again almost much lower than traditional banks

KakaoBank’s revolution can be summarized in two words, “speed” and “convenience

KakaoBank took advantage of its dominant messaging platform, KakaoTalk, which lowered its marketing expenses and brought a feeling of security through the familiarity of the brand

Korea has been considered as an economy with the highest penetration of digital banking, with 96% of the population using online banking in 2014, which made it ripe for innovation.


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