Kakao Bank — the Most Unique Online Bank in South Korea
An Online Piggy Bank Service in Kakao Bank
What is Kakao?
Kakao, one of the widely known IT companies in South Korea, started from a small start-up in March 2010 with its free messenger app “KakaoTalk” and became a giant IT company in South Korea. With its success in KakaoTalk, Kakao has made more and more attempts to become popular in a variety of fields; they became popular with KakaoGame, KakaoStory (SNS), KakaoTaxi, etc.. In 2015, Kakao merged with Daum (a web portal like Google) but did not have so many synergetic effects as experts had expected. However, in 2016, an acquisition of Loen Entertainment enabled Kakao to gain popularity in more and more diverse fields, for example, the music industry. Therefore, Kakao’s annual sales exceeded more than 1 trillion dollars in 2016. Now, Kakao has become a role model in South Korea for other IT companies.
Kakao Bank
In 2017, Kakao’s first release of Kakao Bank made a huge success. On the first day of Kakao Bank’s launch, it surpassed 180,000 new accounts. They could make a huge success from the first day because of convenient and beneficial services; However, the biggest factor of their success was the debit card with its mascots (Kakao Friends) on it.
The First Plan — 26 weeks savings
Kakao’s first savings plan was “26 week installment saving plan,” which literally means starting with a small amount and gradually increasing the amount over 26 weeks of savings with an 1.8% interest rate. However, unlike other installment savings plans, Kakao Bank provides its users with a Kakao Friends Characters’ stamp every time users save money into their savings account. Kakao’s marketing with its mascots led them to another big success, and many people attempt to save their money with this installment savings plan. With the Savings plan’s success, in 2019, Kakao has taken a step to a new service, an online Piggy Bank.
Online Piggy Bank
How does it work?
The online piggy bank of Kakao Bank transfers the change left (less than 1,000 won) from users’ debit cards to their piggy banks automatically every Saturday or every midnight (users can decide). Also, users can choose whether they want to use an online piggy bank or not.
How much money can the piggy bank hold?
Kim Ki-sung, TF Director of Kakao Bank, said that the online piggy bank of Kakao Bank has designated that the piggy bank can hold an amount up to 100,000 won just like a real piggy bank.
Withdrawal?
Just like you need to break your actual piggy bank to get the money from it, an online piggy bank also allows users a full withdrawal only.
Checking the amount of accumulated money?
Users are not able to check the money except on the 5th of every month. However, there is a way to estimate the amount of money inside an online piggy bank. Just like you can estimate the amount of money inside an actual piggy bank by its weight, Kakao Bank’s online piggy bank uses a unique way to depict this. They provide some images (an amusement park ticket, a cup of americano, a lollipop, etc.) to users, and they can estimate the accumulated amount of money with an image. Not only does Kakao’s method intrigue the people who are not interested in savings at all, but also they give a chance to earn 2% interest from it.
Too Low Interest?
Concerns of low-interest-rate by experts
“There is a possibility that it will not be effective in attracting new customers. In any case, the interest rate on deposit products is the biggest benefit, but the interest rate on actual customers is not expected to be high.”
TF Director of Kakao Bank Kim Ki-sung’s reply to concerns.’
“The core of this product is a small amount, automatic, and fun. The purpose of the product is that we want our customers to have an interesting experience through questions that arise in the process of saving money rather than the result of savings.”
My Short Review of Using Kakao Bank’s Online Piggy Bank.
- Easy to open a savings account.
- Fun and helpful to get into a habit of savings because everything is set to be automatic.
- Able to withdraw money from anywhere, anytime.
