High credited customers for Internet Bank
Lee Mi Jong | lmj0919@ | 2017-09-22 11:27:48

Kookmin Bank and Kakao Bank account for 87% of high-end loans. Although, in the beginning, Internet professional banks were expected to build a niche market by attracting customers with low-to-low credit ratings, customers with high credit ratings are now willing to join internet banks.

According to the financial stability report revealed by the Bank of Korea at the Monetary Policy Committee meeting on September 21, 87.5% of Internet banking lenders in late August were high-end users (grades 1 to 3). The ratio is 9.3 % points higher than that of high-end loans in Korea, which is 78.2 %. Meanwhile, the proportion of credit card users (grades 4 ~ 6) in the Internet banking industry was 11.9%, lower than that of domestic banks (17.5%).

As of late July, low-interest loans accounted for 82.5% less than 5% of Internet banking specialists. Low-interest loans accounted for the majority as with domestic banks (77.0%).

Besides, the difference between the interest rates of Internet banks and other banks by credit rating is not large. The average interest rate on Internet banking loans was 4.60%, which was 0.35% lower than that of domestic banks (4.95%). According to the credit rating by credit rating, the ratio of 1 ~ 2 grades was 3.39%, which was 0.32% lower than that of domestic banks (3.71%). In the case of grades 3 ~ 4, the number of Internet professional banks was 4.79%, which was higher than that of domestic banks (4.51%). The interest rate on fixed-term deposits (maturity of one year) of Internet banking experts was 1.73 ~ 2.0% in August, higher than other domestic banks (1.13 ~ 1.7%).

As of the end of August, the number of Internet banking specialists rose by 81.5% to KRW 2.977 trillion, while the size of the loans was KRW2253 billion (an increase of 82.6% per month). The number of account openings is 4.49 million.

The accessibility and convenience of Internet professional banks are superior to those of commercial banks in the financial sector. Especially, it is possible to open new accounts without any restriction on 24-hour time and place, and it is considered to have received great response from 40 ~ 50 major financial customers as well as young people in their 20s and 30s as loans can be consulted.

However, it has been pointed out that the government has not been able to achieve the policy goal of revitalizing the high-yield loan market for middle-income earners, as the financial authorities have given permission to operate the Internet banking business. It is also expected that Internet banking will focus on sales to high credit rating customers rather than low-to-low credit rating customers with high initial risk burdens in the financial sector.


By Lee Mi Jong lmj0919@


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