Recently, Kakao Bank, which is only the second internet-only bank following K-Bank, is gaining great popularity. Kakao Bank successfully passed a million new accounts and more than 300 billion in deposits. The internet-only bank, which was developed to compensate for the faults of the current banking industry, can provide banking services at home. Accordingly, the internet-only bank offers better interest rates to consumers with decreased offline operating expenses. The earning rate of time deposits is an example of the benefits of high interest rates of Kakao Bank. As compared with the commercial banks, the earning rate of time deposits of Kakao Bank is the highest at 2.0% a year. Another big advantage of internet-only banking is that it doesn’t need a public certificate or OTP card.
  What is the key reason for the popularity of Kakao Bank? First, the concept suggests convenience, as the service is based on Kakao Talk, which is the most popular online chatting application. Also, it adapts the Convenient Remittance Payment Service where people don’t need complicated public certification. Therefore, it can easily remit payments to people registered as friends on Kakao Talk. People can’t use the commercial bank services after 4 pm. However, Kakao Bank can be used conveniently anytime and anywhere around the clock. Another advantage is the cheaper transaction fees. Everyone has considered the money wasted when remitting payments to other banks. On the other hand, Kakao Bank users don’t need to worry about it. Kakao Bank offers the incredible deal of exempting transaction fees until the end of the year, but it will then be changed after a policy transformation. Kakao Bank resolved the disadvantages of the payment system, fees, and business hours. That’s the reason for its great popularity. Kim Seong-cheol(’14, Dept. of Industrial Plant Science & Technology), a user of Kakao Bank, said, “When I used a commercial bank, it was very inconvenient because it needs public certification or a security card. However, Kakao Bank can remit payments very fast and conveniently by using the Convenient Remittance Payment System. Also, the fee is free until end of the year. I like it and I don’t need to pay fees when I transfer funds to other banks. Another advantage is its design. Unlike the commercial banks, Kakao Bank designed its check card with the characters of Kakao Talk. I like the latter more than former because it is cute and unique.”
  However, Kakao Bank also has disadvantages. The biggest fear of Kakao Bank users is the security system. The Convenient Remittance Payment System has both an advantage and a disadvantage. It is very convenient as it just requires a password. However, if people lose their cell phone or their password is hacked, anybody who knows their password can remit payments easily. Another disadvantage is the weak response of the consumer service center. In August, the response rate of the consumer service center was low enough to reach 14%. Commercial bank customers can resolve their matters quickly by going to offline banks or calling a counselor. However, Kakao Bank can resolve matters only online or by phone. Therefore, if the response of the consumer service is slow, it will take longer to resolve matters. In this regard, an employee of Kakao Bank said, “Now, our consumer service center doesn’t have many workers. We are seriously thinking about building a second consumer service center after watching the frequency of usage of our consumer service center.”
  Kakao Bank has as many disadvantages as advantages, but Kakao Bank was just launched. Therefore, it is premature to jump to conclusions. Now, the reason for the popularity of Kakao Bank is due to not inconveniencing consumers with short offline operating hours, complicated loan procedures, public certification stress or absurd fees. Consequently, consumers have valued that highly. If Kakao Bank modifies the disadvantages, it will be the best internet-only bank in the future.

By Kim Chae-hyeon
ch38@cbnu.ac.kr