Smartphones realigning banking customs
By Kim Tong-hyung
Smartphones have gone mass market and are fueled further by the increasing demand for electronic banking services provided on handsets, government data suggests.
According to recent figures from the Bank of Korea (BOK), Koreans moved an average 29.7 trillion won (about $26.9 billion) through Internet banking services last year, which represented nearly a 17 percent gain from 2009. The number of daily transactions rose 27 percent to 33.7 million a day.
The 19 financial institutions offering online banking here combined to reach 66.7 million customers last year, with a large chunk of the users subscribed to multiple services, which represented nearly a 13 percent rise from 2009.
Although the majority of the online transactions are still conducted on traditional computers, wireless devices appear to be growing as a medium.
There were 15.7 million mobile banking users at the end of last year and they generated 2.84 million transactions per day, accounting for 8.4 percent of all online banking transactions and representing more than a 66 percent growth year-on-year.
Around 408.8 billion won was moved through the mobile device on an average day, a surge of 53.5 percent from 2009.
The escalation in mobile banking has been fueled by the rising sales of Internet-enabled smartphones such as the Apple iPhone and Samsung Electronics Galaxy S, which took the market by storm in the past year. And with banks racing to develop banking applications for other mobile Internet devices, such as touch-screen tablets, the mobile banking population is likely to multiply at a quick pace.
Daily mobile banking transactions on smartphones, which are used more like handheld computers than conventional phones, were measured at 952,000 per day last year, moving around 46.8 billion won.
Before 2010, smartphones had been a hard sell here due to the high prices of the device and the lack of a content ecosystem. However, the belated introduction of the iPhone in late 2009 sparked a love affair with these sophisticated handsets and other companies like Samsung Electronics and LG Electronics have been flooding the market with rival models.
The number of Korean smartphone users barely reached 400,000 before the release of the iPhone, but surpassed 8 million at the end of last year. Industry observers predict the country’s smartphone population to exceed 20 million by the end of this year.