The Toss Bank headquarters in Gangnam Monday. Toss Bank, Korea’s third exclusive online bank, will debut on October 5. [NEWS1]
Toss makes its official debut as the nation’s third-largest online bank on Tuesday.
Toss, a fintech company founded in 2013, already has 1 million applicants term accounts, thanks to the generous 2% interest rate it offers.
The other two online banks, KakaoBank and K-bank, offer 1.6%.
Toss is also expected to attract people looking to borrow, as its maximum interest rate on unsecured loans is 2.76%, lower than other banks.
The lowest interest rate on unsecured loans offered by Kakao and K-bank is over 3%.
Toss only offers unsecured loans up to 270 million won ($ 227,000).
The government has attempted to tighten lending regulations to reduce record levels of household debt.
Conventional banks have reduced their loans.
“Pre-applications [of 1 million] for the bank [deposit] Account products are a sign that customers have a great interest in what the bank has to offer, â€said Jun Bae-seung, analyst at eBest Investment & Securities.
“Toss Bank plans to roll out low interest rates on loans, deposit accounts with huge benefits, and cash back debit card rewards,†Jun said. “She wants to manage risks in a stable and efficient manner by creating her own credit scoring system using her own customer data in addition to the conventional credit scoring model. ”
Toss already has 11 million monthly active users, more than established banks such as KB Kookmin and Shinhan, which have around 8 million.
KakaoBank has 13 million.
However, since Toss’s capital is only 250 billion won, the maximum amount of loans he can offer is expected to be around 3 trillion won.
Moreover, the government’s attempts to limit household debt are expected to affect even Toss.
“With the squeeze on household lending and the upward pressure on credit spreads, traditional and branchless banks will need to remain vigilant about possible changes in the competitive environment,†analyst Jun said. at eBest Investment & Securities. “Toss Bank’s aggressive strategies may also attract the attention of regulators.”
This is the first launch of a new bank in Korea since 2017.
BY LEE HO-JEONG [[email protected]]
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