Banks seek to attract young customers for future business

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A growing number of commercial lenders are offering cash-equivalent vouchers to parents with children in order to lock in a possible future revenue stream, according to industry officials Thursday.

Driving these efforts is the rapid loss of market share to internet-only peers, whose mobile app-based services are tailored to a young, digitally savvy demographic.

Most traditional lenders are expanding promotional campaigns in which parents are given up to 70,000 won ($49.14) for opening savings or home subscription accounts under their children’s names.

Woori Bank recently offered 50,000 won to parents for opening new accounts under the names of children born in 2024. It also offered an additional 20,000 won for parents opening a home subscription account, meant to help save towards future house purchases, under their children’s name.

KB Kookmin Bank had a similar campaign where up to 30,000 won worth of mobile gift coupons were provided.

The lender offered 10,000 won worth of coupons redeemable on Baemin, a food delivery app, to parents who opened savings accounts for children under 14 through the lender’s mobile app. It also provided two 10,000 won coupons for studio photos.

This is similar to last year’s event, during which up to 40,000 won was given to parents who opened bank accounts under their children’s names. Included were three 5,000 won Starbucks coupons and 25,000 won in cash-equivalent points deposited into their bank accounts.

Shinhan Bank will offer up to 20,000 won to new customers under 19 who open a home subscription account by the end of this year.

Hana Bank will offer the same amount in “Hana Money” to minors for opening a home subscription account this year.

In contrast, their internet-only peers are less eager to run similar campaigns.

Toss Bank is the only internet lender that currently allows parents to open a bank account under their children’s name. However, it does not offer promotional events aimed at expanding its youth customer base.

The 20-29 age group makes up a quarter of Toss Bank's customer base, surpassing the 30-39 age group, which accounts for 21 percent. Users under 20 represent 10 percent.

Similarly, 43 percent of Kbank’s customers are within the 20-39 age group.

However, the same age group accounts for only 31 percent of traditional lenders' customers.

Only 10 percent of traditional banking customers are in their 20s, and 21 percent are in their 30s.

“Many young customers are more inclined to use internet-only banks, leaving more traditional banks desperate to run promotional campaigns to lock in future customers,” an industry official said. “Traditional lenders will have a hard time finding new young customers in the years to come unless they accelerate their digital drive.”