K bank overtakes Kakao Bank after partnering with crypto exchange Upbit

The logos of K bank and Kakao Bank

By Anna J. Park

Internet-only K bank is enjoying a surge in the number of young customers thanks to a partnership with local crypto currency exchange “Upbit.”

During the first two months of this year, the number of new customers who opened new accounts at K bank stood at about 920,000, far exceeding the track record of internet-only rival, Kakao Bank, which saw 380,000 new customers during the same period.

K bank said the number of people using its mobile banking service increased to 3.11 million as of the end of February, surging 42 percent compared to just two months ago when the number of users stood at 2.19 million.

What is noteworthy is that about 70 percent of K bank’s new users during the first two months of this year were in their 20s or 30s. Young Koreans have flocked to the mobile-based bank to invest in coin assets such as bitcoin or Ethereum at crypto exchange Upbit, which requires users to have an account at K bank to deposit or withdraw money for coin trading.

With the increase in the number of young customers, K bank’s monthly active users (MAU) quadrupled in February from June of 2020.

K bank’s partnership with Dunamu, the operator of Upbit, dates back to June of last year and the deal has proven to be beneficial for both sides. Upbit is able to attract new users whose identities can be verified, meeting the government’s requirement for local coin exchanges, while K bank earned a new growth driver in the burgeoning digital currency market.

Despite being the nation’s first internet-only bank launched in 2016, K bank has lagged behind rival Kakao Bank over the past few years, as it faced difficulties attracting capital. Due to the lack of capital, K bank was forced temporarily to stop offering loan products for more than a year, from April 2019 until July last year.

While K bank was stuck in the doldrums, Kakao Bank dominated the market, attracting around 13.6 million users. However, K bank’s counteroffensive seems to be boosting its share of the internet-banking market, based on strengthening its digital asset partnerships during the crypto-currency boom.