Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Banks turn to brand partnerships to attract new deposits as interest margins shrink
Then-KB Kookmin Bank CEO Lee Jae-keun, left, and Starbucks Korea CEO Sohn Jeong-hyun, right, pose with Starbucks employees after signing a business partnership at the Starbucks Korea support center in Seoul, October 2024. Courtesy of KB Kookmin Bank
By Lee Yeon-woo
As interest margins shrink amid declining interest rates, banks are increasingly turning to unique partnerships to attract customers and secure more savings deposits, industry officials said Tuesday.
One of the most notable collaborations is between KB Kookmin Bank and Starbucks. Starting April 1, the bank will launch a bank account for Starbucks patrons, enabling direct payments within the coffeehouse's mobile app. Previously, in-app payments were limited to Starbucks gift cards or credit cards.
Through this partnership, KB Kookmin Bank aims to tap into Starbucks' loyal customer base in Korea. The Starbucks account will offer a competitive 2 percent annual interest rate, higher than that of standard savings deposit accounts.
Kookmin Bank has already seen success with strategic alliances.
It formed an exclusive partnership with the major cryptocurrency exchange Bithumb in January. Due to regulations requiring real-name banking accounts for crypto transactions, the bank saw a surge of approximately 400,000 new current accounts within just over a month of the partnership's launch on Jan. 20.
Other banks are also leveraging partnerships to expand their customer bases. Woori Bank teamed up with fintech firm Toss in January to introduce a service that allows parents to open and manage Woori accounts for their underage children through the Toss app.
A co-branded card launched through a collaboration between Hana Bank, Hana Card and Karrot / Courtesy of Hana Card
Hana Bank has also joined the trend, collaborating with various companies, including Karrot, Coupang, Ediya Coffee and Incheon International Airport Corp., offering financial products and services tailored to these platforms' users.
Similarly, Shinhan Bank launched a partnership with E-Land to integrate an online payment service within the group's membership app, streamlining transactions for its customers.
"As banks face declining profitability due to reduced interest rates, the competition to secure deposits is expected to intensify," an industry official said. "Strategic partnerships, even beyond the financial sector, will likely continue to grow in importance."