Banks race to win over military customers to secure lifelong clients

Republic of Korea Army Special Warfare Command soldiers conduct a special strike operation during extreme cold-weather training at a winter training site in Gangwon Province, Thursday. Courtesy of Republic of Korea Army

Shinhan Bank, Hana Bank and the Industrial Bank of Korea (IBK), selected as operators for the third phase of the government-backed Nara Sarang Card program for enlisted soldiers, have recently rolled out their respective benefit schemes, kicking off a new round of competition, industry officials said Thursday.

The banks aim to reach young soldiers during their first meaningful exposure to formal financial services during mandatory military service and retain them as long-term customers after discharge.

The Nara Sarang Card, literally translated as the “Love of Country Card,” is issued to all conscription-eligible men as part of the military enlistment process and functions as both a payment and salary card throughout their service.

For banks, securing the mandate means gaining access to around 200,000 new customers annually through a highly stable channel, making the program one of the most sought-after opportunities in the retail banking sector.

Shinhan Bank served as the sole operator during the first phase, while the second phase adopted a two-bank model involving KB Kookmin Bank and IBK. In the third phase, the number of participating banks has expanded to three — Shinhan, Hana and IBK — intensifying competition.

Shinhan Bank has broadened its discount offerings to cover a wide range of everyday spending, including on-base stores known as PX, public transportation, convenience stores, cafes, books, food delivery services and online shopping. Notably, cardholders receive a 20 percent discount at PX stores every day, regardless of the purchase amount.

IBK has placed a strong emphasis on PX-related benefits, allowing customers to receive both standard and special discounts at PX outlets nationwide, translating into savings of up to 50 percent. Additional incentives include a partnership with Naver Pay that rewards users with points equal to 10 percent of their spending.

Hana Bank has taken a different approach by lowering eligibility thresholds, reflecting the relatively modest spending patterns of active-duty soldiers. The bank set the minimum monthly spending requirement for key lifestyle discounts, such as public transportation, at 100,000 won ($68) and eliminated spending conditions altogether for core benefits like PX and convenience store discounts.

“Banking experiences formed during military service often shape customers’ financial behavior long after they leave the armed forces,” a banking industry official said. “The Nara Sarang Card is viewed not as a short-term promotion but as a strategic channel for cultivating long-term customer relationships.”

The Banks’ efforts to win over military conscripts are increasingly expanding beyond card perks to talent strategies. In a bid to strengthen expertise in military-focused financial services and marketing, lenders have recently stepped up recruitment of former officers with in-depth knowledge of the armed forces.

IBK launched a hiring drive last December to recruit two former field-grade officers from either the Navy or Air Force to work at its Seoul headquarters. The new hires will be tasked with developing and planning new military finance products, supporting on-site marketing activities at military bases, and coordinating with external institutions such as the Ministry of National Defense and the Military Manpower Administration.

Hana Bank has taken a similar approach, bringing a former field-grade officer on board through its rolling recruitment program in August.