Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Digital capabilities to determine competitive edge for local banks: Deloitte report
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By Anna J. Park
KakaoBank and Toss Bank lead local digital banking practices
By Anna J. Park
Korea's banking sector has been quickly innovating with expanded roles taken by digital banking since the COVID-19 outbreak. This deepened reliance on digital banking is not confined to Korea. “Digital maturity,” or an organization's ability to respond and adapt to technological trends, has been surveyed to have risen across the entire banking sector globally over the past two years.
According to a Korean version report of Deloitte's “Digital Banking Maturity 2022,” which surveyed 304 banks from 41 countries of five continents, about 70 percent of researched global banks now offer a remote account opening option, which is a 15-percentage-point increase from the same survey in 2020.
The report, dedicated to the theme of digital banking maturity, is in its fifth edition, since its first publication in 2016. It is the biggest global digital banking study, providing an in-depth analysis of digital retail banking patterns.
While most surveyed banks turned out to have extended digital banking functions to customers, some of the best players have widened their gap with other banks, especially in areas of investment services, “bancassurance” or selling insurance products through banks, e-government services, card management and other authorization-related services.
More specifically, the past two years' most salient trends in the global digital banking sector are as follows: fully digitalized banking processes, banking apps becoming multi-service platforms, personal finance management, easier access to investments and cross-platform solutions, among other things.
The Korean version of the report in particular noted the unique features of digital banking in the local market. The report said currently 53 million people are actively using six major banking apps ― KakaoBank, KB Star Banking, Shinhan Sol, NH Smart Banking, Woori Won Smart Banking and Hana1Q ― as of August this year. The financial regulator's move to allow financial companies to operate super apps, which incorporate every financial service offered by various affiliates within a financial group, is also accelerating the country's transformation towards digital banking.
Two internet-only banks ― especially KakaoBank and Toss Bank ― were assessed as exerting a special influence on the local banking sector, as they lead digital strategies with their business models. Among traditional banks, Shinhan Bank is surveyed to have the best digital banking capability.
An official from Deloitte Korea highlighted that the degree of satisfaction from digital banking services will now determine customers' loyalty to banks, adding that banking industries' digital transformation has become their calling during this era and that it will be a key competitive edge for banks.