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| Kakaobank CEO Yun Ho-young |
By Lee Kyung-min
Kakao Bank and Citibank Korea have yet to offer services whereby customers can add savings accounts to the list of their bank accounts on the Open Banking online platform, a data-driven financial service initiative spearheaded by the Financial Services Commission (FSC).
The apparent failure to update the service promptly brings into question whether Kakao, the much-touted internet-only fintech leader, has misplaced priority by paying attention only to the upcoming initial public offering (IPO), with its customer-oriented mindset increasingly being neglected.
Kakao Bank plans to complete its planned IPO by the second half of this year. It achieved a net income of 13.7 billion won ($12.1 million) in 2019, only two years after it was launched. The net income for 2020 was 113.6 billion won.
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| Citibank Korea CEO Yoo Myung-soon |
Unlike the two, local commercial lenders have since Feb. 17 allowed their customers to add accounts opened by their competitors on the Open Banking platform, allowing easy, fast and integrated services including balance inquiries and cash transfer. This adds to a continued poor user evaluation of Open Banking, despite the launch of the service over a year ago.
The number of accounts opened under Open Banking exceeded 112 million as of January, 13 months after the system was fully implemented in December 2019. Over 65 million people ― including multiple-account holders ― subscribed to the system.
The number of users rapidly grew, but the most frequently used service was limited to checking account balance, an embarrassing outcome brought on by service providers' reluctance to facilitate money transfer processes.
Data from the Korea Financial Telecommunications & Clearings Institute released in June last year showed 84.5 percent of those surveyed used Open Banking for checking their balance, followed by transactions history inquiries (8.8 percent), and withdrawals or transfers (3 percent).
Kakao Bank and Citibank Korea said the services will be made available this month.
"We are updating the system to offer the service," a Kakao official said.
Citibank Korea said the delay was caused by technical difficulties, adding the service will be provided within the next three weeks.
"Citibank Korea app users will be able to add their savings accounts to their current list of financial accounts on the integrated platform soon," the official said.
