Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
First-ever strike looms at KakaoBank. What's at stake?
Members of the Kakao labor union hold a rally at KakaoBank's headquarters in Seongnam, Gyeonggi Province, July 21, hours before unionized workers at KakaoBank announced a one-day strike set for July 31. Yonhap
By Lee Hyo-jin
Walkout to set precedent for other internet-only banks
Unionized workers at KakaoBank are set to stage what would be the first strike at a Korean internet-only bank on Friday, putting the spotlight on labor relations across the country's digital banking sector, industry officials said Monday.
The walkout follows seven months of wage and collective bargaining talks that began in January but ended without an agreement.
The union said 95 percent of participating members voted in favor of a one-day walkout. Instead of holding rallies, employees plan to use their annual leave to join the strike.
Ahead of the strike, the union on Monday said more than half of the total employees at the bank joined the group, noting that this reflected growing employee dissatisfaction with management's approach to negotiations and the compensation system.
Additional talks remain possible before Friday but if no last-minute agreement is reached, the walkout would mark the first strike at a Korean internet-only lender since the industry was launched in 2017.
Although neither management nor the union has disclosed details of the negotiations, the union is seeking higher performance bonuses and changes to the bank's compensation system.
The lender posted record first-quarter results, with operating profit rising to 211 billion won ($152 million) on revenue of 1.94 trillion won, both quarterly highs.
The bank said it expects customer services to continue without disruption during the walkout.
"We are closely monitoring the situation and will continue to seek a resolution through dialogue," a KakaoBank official said.
The official said the bank would maintain normal operations of its core services, including IT systems, information security, deposits and lending, by deploying essential personnel designated under its collective bargaining agreement with the union.
Industry officials view that a potential strike at KakaoBank could become a watershed moment for Korea's internet-only banking industry, where labor unions have so far played only a limited role.
Neither Toss Bank nor Kbank, the country's two other internet-only lenders, has a labor union.
Unlike traditional commercial banks, internet-only lenders employ a higher proportion of software engineers and IT professionals, where job hopping is common.
As a result, salaries, bonuses and employee welfare are closely watched and frequently compared across the industry.
"Internet-only banks rely more on experienced hires rather than entry-level recruitment, so compensation packages are constantly being compared across companies," an industry official said. "If one bank secures better bonus terms through collective bargaining, both management and employees at rival banks would be watching closely, potentially influencing compensation packages across the sector."
More broadly, the labor dispute at KakaoBank reflects a wider shift in Korea's technology sector, where employees have increasingly sought compensation more closely tied to corporate performance.
Earlier this year, Samsung Electronics reached an agreement with its labor union on performance bonuses after weeks of negotiations. SK hynix, meanwhile, operates a profit-sharing scheme under which 10 percent of the semiconductor division's operating profit is allocated to employee bonuses.