Ahead of the June launch of the Youth Future Installment Savings, three internet banks are joining youth products for the first time. It is the result of aligning interests to secure core customers while following President Lee Jae-myung's policy line emphasizing inclusive finance.
According to the financial sector on the 20th, as the Korea INclusive Finance Agency (KINFA) wraps up recruitment of institutions handling the "Youth Future Installment Savings" by this week, three internet banks—KakaoBank, Toss Bank, and Kbank—will for the first time take part in operating youth policy finance products.
The Youth Future Installment Savings is a product that allows young people ages 19 to 34 with annual income of up to 60 million won to deposit up to 500,000 won a month. The maturity is three years—two years shorter than the existing Youth Leap Account—and new hires at small and midsize companies or low-income youth can receive government support to save up to 22 million won at the three-year maturity.
The handling institution requirements presented by KINFA include: ▲ total assets of at least 5 trillion won ▲ IT infrastructure capable of at least 300,000 cumulative daily accesses via non-face-to-face channels and 20,000 concurrent users. The clause requiring "KINFA grant-funded institutions," which was mandatory for the Youth Leap Account last year, has been removed, and the number of handling banks is expected to increase.
Internet banks have so far shown a somewhat passive stance toward participating in policy products. This year, however, the mood has changed. Non-face-to-face operating procedures have stabilized to accommodate large numbers of subscribers, and the rationale has grown to support asset building for their main customer base, those in their 20s and 30s.
A strong push from political circles is also spurring the financial sector. With President Lee Jae-myung, who pledged inclusive finance early in the term, paying special attention to youth financial products, there is a growing perception among financial companies that attracting this product is an opportunity to broaden touchpoints with the government and build a positive image.
A financial industry official said, "From the banks' perspective, it is an opportunity to secure young people, the core customers of the future, in advance and to respond to the government's win-win finance stance, so there is a willingness to move proactively."