The primary strategy is speed and convenience in mobile applications. We want to be a mobile bank, not a website bank. A single application is everything for us.– Yun Ho-young, CEO, Kakao Bank
About Bank
| CEO | Yun Ho-young |
| Year of launch | 2016 |
| Headquarters | South Korea |
| Customer reach | 13 million |
Product stack analysis
Table 1: Unique value propositions offered by Kakao Bank
| Payments | – Recurring payments – SMS payments – Personalised card designs – Split payments |
| Expense management | Gamified saving challenge |
| Rewards and offers | – Rewards on spending: E-commerce, entertainment, travel, and utilities – Other rewards: Additional interest after completing 3 months in the 26-week challenge – Other rewards: Cashback payments on the 10th of the next month for approved payments from the 1st – last day of each month |
Payments:
Kakao talk: The neobankās instant messaging app- KakaoTalk- has a wire transfer feature that allows its users to directly transfer funds to other accounts via personal or group chats. Users can perform this function by simply entering their passcode or using their fingerprint. Moreover, money can also be transferred to those not using KakaoTalk or Kakao Bank. Users can use the āPesterā feature in the app to automatically send a reminder asking others to pay them.
Expense management:
26-week challenge: The 26-week challenge is a flexible and gamified savings plan that aims to inculcate savings habits in young Kakao customers. Customers can save for different goals. According to Kakao bank, the most popular savings goals were travel, dining and shopping. Customers can choose their preferred deposit minimums- KRW 1,000 (USD 0.87), KRW 2,000 (USD 1.74), KRW 3,000 (USD 2.60), KRW 5,000 (USD 3.47) and KRW 10,000 (USD 4.34). The total amount of savings increases by the minimum deposit chosen by them.
For example, if the customer chooses KRW 5,000 (USD 3.47), then the total savings in the second week will amount to KRW 10,000 (USD 4.34). Kakao Bank awards customers with personalised emoticons called Kakao Friends when they complete their weekly savings. Customers who leave the challenge within three months gain 0.3% interest, while those who continue for more than three months gain 0.5%.
How can you match up with Kakao Bank
- Leverage the APIs of social media giants or create in-house instant messaging banking capabilities within your banking application to simplify your customersā banking journey.
- Adopt gamification practices to make your customersā banking, budgeting, and savings experience fun and engaging.
Top priorities for Kakao Bank:
As leaders of Kakao bank should focus on two major areas to increase their customer reach and compete with the other neobanks in South Korea:
- Despite being the second-largest neobank in South Korea (25% of the total population), there have been rising complaints regarding the Bankās unilingual mobile application. To attract more non-native South Korean customers, you could offer its services in English as well.
- As a tech-first company, you could build a multi-lingual, personalised, and conversational AI chatbot to enhance customer engagement and customer service. For example, Kakao can embed an option that allows customers to choose their favourite Kakao friend character as their personal banking assistant who will help them track and perform banking activities. This will further enhance the customerās digital experience by making mundane tasks entertaining.