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Innovation and a strong organisation key to Kakaobank’s success
Kakaobank has been successful as a pure mobile bank, with a strong smart strategy, and a shareholder composition contributing core digital online capabilities to the company.

June 19, 2018 | Chris Kapfer
  • Banking account was the core business of Kakaobank, with a savings borrowing, spending, payments and international transfer services built on top of it
  • Kakaobank’s team spent time on design principles, creating an app that allows easy path finding and usability
  • The active rate of Kakaobank app users has been consistently above 80% based on one transaction within a month

Kakaobank of Korea Corp (Kakaobank) received a full banking licence and went public in July 2017, making it the first pure mobile bank in South Korea’s banking sector. The digital bank is an offspring of Kakao, the largest social communication platform in the country, which has 42 million active users out of the 50 million population. Messaging app Kakaotalk was already leading Korea’s financial technology (fintech) innovation with Kakaopay and its bank wallet Kakao.

Banking account was the core business of the bank, with a savings borrowing, spending, payments and international transfer services built on top of it.

The Kakaobank platform, its offices and human resources were built from scratch. It is connected to Kakao via open application programming interface (API), heavily leveraging on customer data.

Traditional banks bought into the consulting myth that technology was a peripheral competency, causing banks to outsource massively. In hindsight, it was one of the biggest tactical management failures in the operational history of commercial banking.

Like their counterparts in China, Kakaobank made technology and information technology (IT) its core backbone, building every system within, which made it easier to upgrade and make changes. Compared to commercial banks in Korea where IT staff is less than 5% to 10%, 41% of Kakaobank’s 390 employees are working on IT.

Kakaobank’s team spent time on design principles, creating a superior app in the Korean market that allows easy path finding and usability, wh...

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Keywords: Mobile Payments, Technology, Mobile Banking, Innovation