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Koreans favor fintech apps over those of banks: report

A user of mobile payment service Kakao Pay makes a payment with the app. (Kakao Pay)
A user of mobile payment service Kakao Pay makes a payment with the app. (Kakao Pay)


South Koreans used fintech company apps nearly nine times more than those operated by traditional banks every month last year, a report showed on Thursday, suggesting rapid growth of the digital finance market driven by its young and tech-savvy population.

According to global mobile app analytics firm App Annie, mobile users of the nation’s top five fintech apps, such as payment solution Kakao Pay, Toss, and Kakao Bank, used the apps 225 times a month on average last year, tantamount to an average of seven times a day.

The monthly figure is 8.9 times higher than the number of times mobile users utilized the top five banking apps on a monthly basis, such as those run by Woori Bank and Hana Bank. The gap between usages of fintech and conventional bank apps appears to be the widest in the world, the company said.

Kakao Pay subscribers, for instance, collectively spent 54.8 million minutes on the app last year in total, up 510 percent from 2019. On average, one subscriber spent 5.2 minutes a month, up from 2.6 minutes from a year earlier. Mobile users accessed the app 9.1 times a day on average last year, up from 5.7 times from the previous year.

Korean users became more dependent on easy-to-use mobile services run mostly by emerging fintech firms under the pandemic situation that started early last year, according to market watchers.

“A mobile money transfer service as well as a ‘small change investment,’ have garnered popularity during the pandemic as people increasingly used mobile services than offline ones,” said a Kakao Pay spokesperson.

The so-called “Donghak Ant” movement, which refers to a stock-buying spree driven by amateur retail investors during the bearish market last year, also helped increase the use of mobile stock trading apps, according to the analytics firm.

“The entire time that mobile users spent on stock trading apps grew 120 percent on-year in 2020, much higher than a global average of 55 percent,” the company said.

Among the most popular stock trading apps are those run by Kiwoom Securities, Samsung Securities and NH Investment & Securities.

As the government has been trying to relax strict financial regulations here, the local market expects to see proliferation of convenient mobile services.

Most of the nation’s rising fintech firms like Kakao Pay, Toss and K bank are rolling out new services.

Kakao Pay Securities, an online-only brokerage under Kakao Pay, for instance, has launched a product that enables users to put leftover change in exchange-traded funds, targeting young customers who hope to save seed money for larger investments.

By Kim Young-won (wone0102@heraldcorp.com)
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