Digital Banking Environment
Open-source online and mobile banking, not limited to certain Web browsers and operating systems, is becoming widespread in Korea. Local banks used to focus on Internet Explorer and Windows-based Internet banking as recently as a few years ago, while running auxiliary systems for open-source banking. However, the two channels are increasingly converging these days with the popularization of smartphones and diverse Web browsers.
NH Bank jumped on the bandwagon in February this year when it updated its operating systems. The Industrial Bank of Korea (IBK) is planning to do so within the first half, too.
Standard Chartered (SC) Bank Korea and the Korea Exchange Bank (KEB) are moving ahead with projects to the same end as well, which are scheduled to be wrapped up before the end of H1 next year at the latest. Shinhan Bank and Hana Bank are examining the feasibility of similar projects.
It was KB Kookmin Bank that adopted open-source banking for the first time in Korea. It introduced the system in H2, 2011, followed by Woori Bank in April last year.
They were quite lukewarm about open banking for some time though, because Internet Explorer and Windows OS prevailed. However, things began to change in 2012 as browsers were diversified and the number of Macintosh and Linux users increased. According to StatCounter, the ratio of IE users in Korea has declined from 92.32 percent in March 2011 to 79.49 percent a year later, and to 76.12 percent in March of this year. In the meantime, the percentage of Google Chrome users soared from 3.91 percent to 20.86 percent, and that of Mac OS also increased from 1.03 percent to 1.55 percent during the same period.
This can be attributed to the popularization of smartphones as well as the increasing interest in browsers other than IE. The smartphone penetration rate reached 79.7 percent in Korea last year, leading to a greater use of various web browsers such as Safari and Chrome on mobile and desktop alike.
The proportion of Internet banking is jumping at the same time, and banks find it urgent to win over more online customers. The ratio of teller work to the entire banking processes fell from 26.3 percent to 12.2 percent between late 2005 and late 2013, whereas that of online banking almost doubled from 18.6 percent to 34.1 percent. Under the circumstances, banks are paying more attention than before to the users of Chrome, Safari, and MacOS.
“It takes an astronomical amount of money to set up a converged system, and thus system integration is no walk in the park for any bank,” said an industry source, adding, “Still, various banks are moving in the direction, which implies that the importance of open-source Web environments is on the rise.”