Hana Bank brand ambassador and actor Kim Soo-hyun promotes the company’s new auto finance services (Hana Bank)
South Korean banking groups this year began upgrading their car loan and finance services to the next level, aiming to go beyond their traditional businesses to attract mobile-first customers.
KB Financial Group, the nation’s No.1 banking group by total assets, has expanded its auto finance services offered through online and mobile platforms, primarily through its KB Capital leasing and installment finance unit .
On January 4, KB Capital signed an agreement with Volvo’s electric vehicle brand, Polestar, which allows customers to choose the type of car and financing they want on the same online platform. The quick and easy service – which takes just 60 seconds to complete according to KB Capital – is the first of its kind between an automaker and a financial institution here.
KB Capital also renewed its contract with Jaguar Land Rover Korea, the British car brand’s local importer, earlier this month, offering exclusive services to customers. Long-term car rental services, 72-month loan offers and interest-free deferred payments for certain models are the main benefits to be offered.
KB has also adopted the government-led financial data service technology “MyData” on its KB Chachacha used car finance mobile platform. The integration will allow users to see their auto loans and installments as part of comprehensive financial data of their expenses, bank account balances, loans, insurance and more, allowing customers to manage their finances more efficiently.
An online and mobile car finance platform operated by KB competitor’s credit card issuer Shinhan is set to get an upgrade this year due to its popularity, the company said earlier this year. this month. Shinhan Card’s car finance platform MyCar said in December that its average monthly users jumped 215% to 600,000 from 190,000 year-on-year during the cited period.
Millennials and Gen Z customers accounted for 47 percent of MyCar users, Shinhan Card said, indicating that a new generation of customers prefer online car finance services over face-to-face services.
The main subsidiaries of banking groups are collaborating with each other or with startups to better respond to customers looking for in-depth car financing services.
Woori Financial Group’s flagship banking unit, Woori Bank, recently entered into an agreement with Woori Card and Woori Financial Capital to launch the comprehensive online and mobile car finance platform Woori One Car. The service analyzes users’ line of credit through accounts opened in Woori and suggests suitable car loan options. If the user registers his license plate on the app, he is offered information about his regular checks and the current market value of the vehicle.
In December, Hana Bank partnered with Cardong, a car appraisal platform here, to add appraisal services to its car finance services. Through its existing Hana 1Q mobile app, its users can calculate the value of the car they want and receive information about various tax credits and other financial assistance.
The latest efforts by banking groups come as the number of customers who prefer to buy cars with credit card installments and loans from leasing and installment finance companies is growing rapidly.
Outstanding loans from leasing and installment finance companies such as KB Capital – referred to here as “capital companies” – for customers buying cars amounted to 27.7 trillion won (23. $1 billion) at the end of September last year, the latest data from the financial monitoring service showed.
During the same period, customers of six major credit card issuers here – Shinhan, KB Kookmin, Woori, Samsung, Hana and Lotte – paid a combined 9.7 trillion won with cards from the companies to buy cars , according to separate FSS data. . This figure is 13.1% higher than the 8.6 trillion won in 2020, and more than doubled from the 5.4 trillion won posted in 2017.
By Jung Min-kyung (firstname.lastname@example.org)