Mobile loan products currently served by banks have come a long way in terms of service quality and diversity. For one thing, a wide array of loans are offered on mobile platforms now, from credit loans, household loans such as housing mortgage loans, to corporate loans.
Their services are enhanced also in that what used to be a simple loan application has evolved to be a one-stop service from loan applications, to contracts and execution, all done without having to visit the branch.
Above all, mobile loan products seem to multiply the impact of the “smart finance” expansion on the banking industry.
In this light, banks need to regroup themselves, such as figuring out how to utilize extra staff, on the heels of reduced demand for loan consultation.
A high ranking employee at a local bank relayed, “Mobile loan expansion can be another game changer for the banking industry. Internally, we are mulling over the possibility of applying mobile loan technology to automated machines.”
The banks are scrambling to expand mobile loan products because of their growth potential.
Last year, in 17 local banks, the number of smartphone mobile banking users stood at 37 million, 55.2 percent up year-on-year, and the growth rate was over five times that of Internet banking.
For now, the banks are setting loan limits conservatively due to data shortages such as the default rate and the system operation still being in its initial stages.
Woori Bank’s mobile loans are capped at 20 million won (US$19,560), about 20 percent of the offline loan cap.
However, the cap is to be lifted on the back of mobile loan’s rapid growth and system stabilization.
One local bank loan officer said, “The sky is the limit for mobile loans, which only accounts for five percent of the total currently.”
Some see it as such a game changer that it could even trigger a banking revolution.
A similar example can be found in securities firms, where they drastically changed their operating strategies while downsizing trading rings, in light of active mobile stock transactions and a dearth of consultation demand.
A local bank’s vice president pointed out, “Mobile loans can trigger enormous expansion of credit volume. Management strategies should be altered in accordance with ever-evolving loan products.”