Kakao Bank enrolls more than 1 million accounts in five days

Kakao Bank publishes more than 1 million accounts within 5 days after launch. KakaoTalk's Kakao Bank is a second virtual bank in South Korea and on Monday has attracted more than 1 million accounts only five days since it was inaugurated. Kakao Inc. said the number of customers at 1 pm recorded deposits of 344 billion won (US$307 million) and loans of 323 billion won.

Tinuku Kakao Bank enrolls more than 1 million accounts in five days

Seoul-based KakaoTalk technology operator Kakao Inc said it issued 9,800 accounts per hour. Kakao Bank's performance goes far beyond the country's first virtual bank, K-Bank, which began operations in April.

Kakao Bank launched by Kakao Inc. as KakaoTalk's most popular mobile platform operator in South Korea. Social media users can open Kakao Bank account by downloading smartphone application to add mobile number and ID number without having to visit traditional bank office.

Internet banks have brought innovation to the financial sector and are increasingly pressuring the ways of traditional banking. Traditional banks have inevitably had to extend mobile banking services in recent years as an effort to remain relevant in the times.

During the first quarter of 2017, 81 registered traditional bank branch offices were closed and an estimated 334 more branches will soon be closed. This year, Citibank is expected to close 90 out of 133 branch offices and KEB Hana Bank will close 70 branch offices.

The main challenge of Kakao Bank in the future is the adequacy of bank capital. At the end of June, K-Bank temporarily suspended credit-based consumer loan sales after reaching its 900 billion-dollar deposit lending targets to maintain its capital adequacy ratio.

Kakao Bank and K-Bank are likely to suspend loans until the capital increase more. However, the strict Banking Act in South Korea has made it difficult for K-Bank shareholders, KT Corp, with an 8 percent stake. Non-financial institutions are only allowed to own 10 per cent of bank ownership.

But Kakao Bank claims to be no trouble because its biggest shareholder is a financial company. The company has a capitalization of 300 billion won. Korean Investment Holdings and Kakao Inc. each have 58 percent and 10 percent shares. Other shareholders are Kookmin Bank, eBay and Tencent Holdings China.