Banks join hands with mobile carriers

KEB Hana Bank's head of future finance projects Yeom Jeong-ho, center, poses with SK Telink CEO Kim Sun-jung, left, and SK Telecom's head of sales Kim Sung-soo after the three signed an agreement to collaborate on developing innovative services in the finance and telecommunications sector, at the SK Telecom's office in central Seoul, Thursday. / Courtesy of KEB Hana Bank

By Kim Bo-eun

Banks have been collaborating with telecommunications firms amid heightened competition to secure customers, tearing down the walls that had separated the industries.

They are seeking to win over customers by providing convenient mobile banking services and cutting costs of phone plans.

KB Kookmin Bank, as the first mover, joined hands with LG Uplus, embedding a USIM chip in designated mobile phones that are tied to affordable phone plans.

Users of the designated smartphones get the USIM chip, which they can place in new handsets when they switch phones, eliminating the need to set up a certification system.

The phone plans are designed so that the more KB-related services the user adopts, the greater the discounts become. For example, a user who makes transactions with a KB Kookmin card can get discounts on phone rates. An unlimited data plan can be discounted down to 7,000 won a month, depending on discount rates.

This compares with unlimited data plans of the three mobile carriers for regular smartphones, which begin at around 30,000 won.

Kookmin is running a pilot program for its project Liiv M, and will allow the public to sign up for the phones this month.

A Kookmin Bank official said the project is intended to attract young customers, especially teenagers who first sign up for smartphones, as this can generate a lock-in effect.

This makes sense because the smartphone penetration rate of secondary and high school students was over 95 percent as of 2018, and students tend to use cheaper phone plans.

Shortly after Kookmin launched its initiative, KEB Hana Bank announced it would introduce similar plans.

Hana said Friday it will cooperate with SK Telecom and SK Telink to collaborate in innovative financial and telecommunications services.

SK Telecom is the largest mobile carrier here, and SK Telink is its affiliate in charge of budget phone plans.

The bank plans to introduce its own budget phone plan, although it declined to provide a specific time frame for the launch.

Hana is also seeking to work with SK Telecom in artificial intelligence and big data.

A bank official said the three entities are in the beginning stages of their collaboration, and have yet to produce developments.

But Hana's intentions to work with telecommunications firms is the same as that of KB.

"We are seeking to increase our customer base by attracting various groups and creating synergy with players in other industries," a Hana Bank official said.