Internet-only banks are strengthening their lineups of financial products for minors in a bid to broaden their customer base and build a sustainable foundation for long-term profits, industry officials said Tuesday.
Their offerings have recently expanded beyond children and teenagers to include products aimed at fetuses. These products feature simple app-based enrollment processes that eliminate the need for documents such as family relationship certificates, underscoring the convenience and accessibility that set internet banks apart.
In October, Toss Bank introduced a prenatal installment savings account, completing a full-cycle lineup of financial products spanning pregnancy, childbirth and childrearing.
The product is a flexible savings plan designed to help parents prepare for a child’s future from pregnancy onward to complement the bank’s existing child-focused checking accounts. Launched in 2023, the checking accounts marked the first time an internet-only bank enabled parents to open accounts for their children through fully digital procedures, without a face-to-face visit to a physical bank.
KakaoBank also offers a child-focused checking account, along with an installment savings product, allowing parents to open and manage accounts in the names of their underage children. Since their debut, the services have attracted an average of about 4,000 new users per day, quickly pushing total subscriptions past the 100,000 mark.
According to the country’s largest internet-only bank, the popularity of these accounts stems from the streamlined sign-up process and features that allow both parents to participate in managing their child’s account.
For example, when one parent opens the checking account, they can invite the other via a link to jointly oversee the account, while children with mobile phones registered in their own names can also view their balance.
Kbank operates the Alpha Card, a prepaid payment service targeted at teenagers aged 14 to 17.
To make financial activities more engaging for young users, the bank has introduced a gamified feature, through which users earn rewards by completing daily challenges. Once accumulated rewards exceed 3,000 won, they can be withdrawn in cash.
“So-called kid banking products allow banks to guide customers naturally from children’s accounts to youth accounts and, ultimately, to adult financial services, helping to lock in future customers,” an official at one of internet-only banks said. “Since parents are typically responsible for opening and managing their children’s accounts, kid-oriented products can also serve as a catalyst for encouraging parents to switch their primary banking relationships.”
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