The annual salaries of employees at internet-only banks are rising steeply. Employees at KakaoBank and TossBank receive 'multi-million won salaries' and are surpassing the average compensation of some commercial banks. As the scale of the internet banking business grows and competition for attracting experienced personnel intensifies, the salary increase rate is further expanding.
According to the annual report on the governance structure and compensation system of the three internet banks (KakaoBank, Kbank, TossBank) released on the 16th, the average compensation for employees at the three banks last year was 110 million won. Breaking it down by bank, TossBank had the highest average compensation at 117 million won. KakaoBank's average compensation ranked second at 114 million won, while Kbank's average compensation was recorded at 99 million won.
Employees at KakaoBank and TossBank were also receiving multi-million won salaries. Last year, employees at TossBank earned an average compensation of 113 million won, while those at KakaoBank earned 111 million won. The average compensation for Kbank employees is estimated to be around 97 million won, bringing them close to achieving multi-million won salaries.
The upward trend in compensation at internet banks is steeply rising every year. The average compensation for employees at KakaoBank and TossBank increased by 10.7% and 11.2%, respectively, compared to 2023. TossBank's average compensation decreased by 13.9% over the past year due to an increase in total personnel, which lowered the average. However, when compared to the average compensation in its first operational year in 2021 (61 million won), employee salaries have nearly doubled over three years.
Due to rising labor costs in internet banking, the average compensation at some internet banks has surpassed that of commercial banks. Specific compensation details for the three of the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori) were disclosed, with KB Kookmin at 116 million won, Shinhan at 134 million won, and Woori at 114 million won. In terms of average compensation for employees, those at KakaoBank and TossBank earn more than those at Kookmin and Woori.
In particular, the situation at KakaoBank shows that executives have particularly high pay. Last year, 26 executives at KakaoBank received a total of 9.02 billion won, with an average annual salary of 347 million won per executive. Considering that Kbank and TossBank’s average executive compensations are 171 million won and 268 million won respectively, KakaoBank provides compensation that is in the multi-million won range higher than its competitors. This level is also higher compared to the average executive compensation at Shinhan Bank (313 million won) disclosed last year.
The steep increase in compensation at internet banks stems from the recruitment of experienced employees. A significant amount of money is being spent on attracting talent in development roles. The recruitment of developers for internet banks is not limited to the financial sector. They have to compete for developers with information technology (IT) companies. To lure in capable developers, internet banks must offer salaries higher than those at big tech companies, which is causing the number of high-paying developers within internet banks to rise.
An official from an internet bank noted, "The proportion of developers within internet bank organizations is relatively large compared to traditional banks," adding that "After the COVID-19 pandemic, the value of developers surged significantly, and to scout talented developers from other corporations, additional pay must be offered on top of already high salaries, which is driving up the average salary of employees."