The crypto exchange tie-up may not be the most sustainable value proposition in the long term, but it will do for now. After five years of languid growth, K bank needs something to bring customers onboard fast, and bitcoin is one way to do it. The tie-up with Upbit offers K bank's customers something they cannot find at Kakao.
Bitcoin has risen an astronomical 800% over the past year, and was at about US$58,000 earlier this week, down from a high of US$62,000 earlier in March. The paramount cryptocurrency could climb much higher before peaking, giving K bank plenty of growth momentum ahead of an expected IPO in 2022 or 2023. If the bitcoin bull market prevails, K bank will go public sooner rather than later.
Meanwhile, K bank's is opening new accounts at a faster rate than Kakao for the first time ever. To be sure, K bank is starting from a much lower baseline. Still, the growth in January and February was impressive. K bank attracted 920,000 new customers in the first months of the year, compared to 380,000 for Kakao. K bank's mobile banking service users also grew 42% to 3.11 million by the end of February, compared to 2.19 million in late December.
K bank's deposits reached 4.5 trillion won ($4.02 billion) by the end of January, adding a record 750 billion won in just a month's time. In contrast, Kakao Bank's deposits grew just 112 billion won during the same period.
The crypto friendliness of K bank is especially popular with millennials and Generation Z. According to The Korea Herald, 70% of the digital lender's in the first months of the year were in their 20s and 30s.
K Bank also provides an interest rate as high as 1.3% for one-year deposits and up to 1.8% for one-year installment savings. That is significantly higher than most incumbent lenders, which offer an interest rate below 1%.