Value context and insight. lkm@koreatimes.co.kr
Banks expand cooperation with fintech firms, retailers for survival
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By Lee Kyung-min
A growing number of commercial lenders are strengthening partnerships with fintech firms and logistics firms in a bid to identify new revenue streams, aided by the new tech industry players’ tailored services, market watchers said Thursday.
Also contributing to the appeal are reduced funding costs for the lenders, since low-cost deposits are far cheaper than issuing bonds or rolling out high-interest promotional savings accounts.
Many say the new trend will redefine partnership dynamics in the financial industry, long dominated by the view that fintechs and commercial lenders will remain in competition in a rapidly saturating market.
According to the financial industry, NH NongHyup Bank recently signed an agreement with Naver Pay, the payment subsidiary of the country’s largest web portal Naver, to create a payment system where customers will be able to use their points or mileages interchangeably.
The bank subsidiary of the NongHyup Financial Group seeks market expansion, underpinned by the Naver subsidiary’s 34 million users. The system, set for launch this month, is the latest development in the previous agreement signed in February.
A similar partnership has been ongoing between KB Kookmin Bank and Shinsegae Group since April.
The bank subsidiary of KB Financial Group launched a joint product in partnership with Starbucks Korea, operated by Shinsegae. It allows Starbucks account holders a streamlined payment system using KB accounts within the coffee chain’s app.
It also plans to launch an app where users of SSG.com, the conglomerate’s e-commerce platform, will be able to buy financial products offered by KB Kookmin by the end of the year. These products will allow customers to keep SSG Money, a method of payment and a currency usable on the SSG platform, in KB Kookmin accounts while generating interest.
In March, Hana Bank introduced a savings account in partnership with Karrot, the country’s largest online community market platform. The product allows users to keep their prepaid "Danggeun Money," a method of payment and a currency usable on the online platform, while generating interest.