Well Set to Secure Users Quickly
The author is an analyst of NH Investment & Securities. He can be reached at junsup@nhqv.com. -- Ed.
We expect Toss Bank to secure users quickly thanks to its strong platform power and aggressive marketing. However, achieving long-term stability is to hinge upon securing quality mid-interest loans.
Launch of Toss Bank to strengthen Toss’s financial platform status
The October launch of Toss Bank is to boost Toss’s financial platform status. With its business scope to now range from simple remittance services to Toss Securities (to increase user time) and to Toss Bank (to expand accessibility to financial consumers), Toss is securing solid footing to improve the quality of its traffic.
Toss Bank foretells aggressive marketing from the get go, with offers including a 2% interest rate for basic checking accounts, zero ATM fees, a credit loan limit of up to W270mn with interest rates starting at 2.76%, and W46,500/month worth of check card benefits.
Well set to secure users quickly, but long-term key is securing quality loans
Considering the platform power and marketing performance of Toss (as proven through Toss Securities), Toss Bank should easily be able to attract its target clients and to build up its account and deposit figures.
But, the long-term key to success is to be the securing of quality loans. Given the household debt management stance of regulating authorities, we view attracting high-standard mid-interest loans as being essential. Moving ahead, Toss Bank will need to minimize credit costs while at the same time secure sufficient liability duration.
Competition between Internet banks to intensify; impact on commercial banks to be limited
With the launch of Toss Bank, competition is to intensify between Internet banks over users, traffic, and quality mid-interest loans. However, the impact of Toss Bank’s presence on major commercial banks should prove to be relatively limited given the differences in both their target customers and their mainstay loan strategies.