South Korea’s first online-only bank K Bank has attracted more than 100,000 customers in just three days since its launch on Monday, further intensifying the competition in the commercial banking industry in the country.

K Bank said the number of people signed up for its membership amounted to 100,329 as of 8:00 a.m. on Thursday. It opened 106,379 savings accounts over the last three days with 73 billion won ($64 million) deposited. It extended 8,021 loans worth 41 billion won and issued 91,130 debit cards.

People in their 30s took the lion’s share of 39.8 percent of the total users, followed by those in their 40s with 30.4 percent, 20s with 16.9 percent, 50s with 10.9 percent and 60s with 2 percent. Member subscription peaked between 6:00 p.m. to midnight with 31.9 percent as the main customers aged between 30 and 49 who find it difficult to use bank services during business hours seemed to have signed up after work.

Shim Sung-hoon, chief executive officer of K Bank, said the company has doubled the number of customer service employees to 200 and strengthened system monitoring and management to keep up with the faster-than-expected growth in its customer base.

The bank’s first batch of savings account products named Code K, which offers 0.4 to 0.7 percentage point higher interest rate of 2 percent than that of other commercial banks, sold out in just three days. It released the second batch immediately after.

The greater-than-expected popularity of the internet-only bank has kept other commercial banks on their toes. Savings banks in a direct competition with the online-only bank have rushed to cut their borrowing costs. SBI Savings Bank on Wednesday launched a new loan with a 5.9 percent interest rate, 1 percentage point lower than its most popular loan named Cider.

In the fierce competition, savings banks could move their target customers to those with lowest credit ratings. An unnamed official from a savings bank said the online-only bank are posing a threat to them that are already suffering from the financial authorities’ tighter regulations on bank lending to curb the nation’s snowballing household debts.

Commercial banks in fear of losing customers out to the online-only bank are also raising interest rates on their savings accounts. Woori Bank on Thursday launched fixed deposit accounts that provide up to 2.0 percent interest and installment savings accounts of up to 2.2 percent rate.

By Chung Ji-sung

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]