Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Fintech app users drop after open banking services
Viva Republica headquarters in Seoul / Yonhap
By Park Jae-hyuk
By Park Jae-hyuk
Viva Republica, the operator of mobile money transfer app Toss, has suffered a blow with the advent of open banking services, which enable financial consumers to manage all of their bank accounts using just one app, data showed Monday.
According to a recent survey by NICE Data & Research (D&R), the IT service and research arm of NICE Group, the number of Toss users dropped to 6 million a week after the launch of open banking from 6.7 million a week before the service's launch.
Although the number slightly rebounded two weeks after the launch of open banking, Toss still has fewer users than before the beginning of the service.
In contrast, the number of users of Korea's major commercial banks' mobile apps increased after the launch of open banking.
The same survey, which kept the banks' names anonymous, showed the number of top four banking app users went up to 2.66 million, 2.18 million, 2.14 million and 1.23 million on the first day of open banking, respectively, from 2.13 million, 1.88 million, 1.71 million and 880,000 before the services' launch.
NICE D&R presumed that those who used the fintech firm's app switched to commercial banks' apps after the test run of open banking in October.
“It is presumed that customers who used Toss, Banksalad and Broccoli have switched to commercial banks' apps as they began offering similar services after the launch of open banking,” Kim Young-jae of NICE D&R said.
“Considering remittance charges and first-mover advantages, I think commercial banks took the advantageous position.”
However, Kim said the trend may change when fintech firms enter the race for open banking in December.
Currently, 10 local lenders are taking part in the preliminary service.
The financial regulator plans to allow all commercial banks and fintech firms to offer open banking services starting Dec. 18 as the trial period for the service will end then.
Viva Republica said it is confident about the competition with commercial banks.
“In addition to remittance, our Toss app enables 40 types of financial services including loans, credit score checks and credit card usage statements,” a Viva Republica spokesman said. “Our service is still attractive enough to customers, who want to be given various services using just one app.”