Korea's best digital bank 2018: kakaobank
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Korea's best digital bank 2018: kakaobank


Daniel Yun and Yan Lee, Co-CEOs, kakaobank.jpg
Daniel Yun & Yan Lee, kakaobank

Korea’s two fully licensed digital lenders, kakaobank and K Bank, hit the ground running in the second quarter of 2017. Both were well-funded and backed by large institutional shareholders: investment management firm Korea Investment Holdings and KB Kookmin Bank both backed Kakao, while a slew of well-heeled investors including KT Corporation (South Korea’s largest telecoms provider), Woori Bank and China’s Ant Financial invested in K Bank.

After that, though, their paths diverge. Since its formation, kakaobank, which has two chief executives, Yan Lee and Daniel Yun, has powered ahead, becoming the dominant onshore digital bank. It opened 240,000 new accounts within 24 hours of its launch, and at the end of September 2018, it boasted 6.8 million customers, or a quarter of the working-age population. K Bank’s growth has been far slower: it recorded 810,000 active customers at the end of September 2018.

The finances of Seongnam-based kakaobank, run by co-chief executives Daniel Yun and Yan Lee, also look rosier and less stretched: the digital lender reported a net loss of W12 billion ($10.6 million) in the first half of 2018, far smaller than K Bank’s W39.5 billion loss in the same period (which it blamed on the rising cost of IT upgrades). When K Bank tried to raise W150 billion in July by selling new shares, the deal fell flat and it raised only a fifth of the target amount, due in part to disagreements between shareholders over valuation.

But it is full steam ahead at kakaobank, which issued 700,000 debit cards in the third quarter of 2018, taking its total to 5.6 million.

The bank has focused intently on making its products easy to use. It takes customers an average of seven minutes to open an account and five minutes to secure a loan. Users of KakaoTalk, a free mobile-based instant messaging application with 47 million active monthly users, can send and receive money to one other without needing to open a bank account.

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