DGB Financial Group executives meet in Zepeto. (DGB Financial Group)
Financial institutions are embracing the technological shift from physical to digital space with renowned bankers who experience the virtual world through virtual reality headsets and hold executive meetings in “metaverse” online settings.
Financial companies are deploying digitized financial goods and services suitable for the MZ generation because they see them as their future source of growth.
Woori Card launched the “Today’s Debit Card” on June 23, which offers cash back to franchise stores frequently visited by the MZ Generation. The franchise includes online shopping and delivery service platforms and subscription service platforms such as Netflix and Melon.
Hana Bank on Tuesday introduced “Kid to Rich Application,” an app designed for parents to send stipends to their Generation Z children. Children can save money and invest in stocks. Parents receive reports that analyze their children’s spending habits.
Financial firms are also considering “metaverse” channels as a long-term strategy to target younger clients. Metaverse are virtual worlds shared by people in the real world. Zepeto, created by the country’s largest internet company, Naver, is a Korean metaverse platform with over 200 million users. About 80% of them were under 18 in February.
“Kid to Rich Application” by Hana Bank, an application for parents and children (Hana Bank)
“It shows our commitment to adapt to a rapidly changing digital culture. We plan to open a metaverse bank where people can buy financial goods and services in the near future, ”said a DGB Financial Group official.
IBK Securities is already seeing good prospects for setting up its own metaverse branch. The company signed a memorandum of understanding on June 22 with Meta City Forum. “Clients, mainly of the MZ generation, will be able to trade stocks in the metaverse branch. It will be like trading stocks through mobile trading systems, ”said an IBK Securities official.
Experts say the big bets of financial firms on targeting their future key clients stem from the Koreans’ remarkable adaptability and, of course, their “ppali ppali” DNA (hurry up).
“South Koreans are very adaptable to digital change. As innovative technologies make their lives easier, they don’t resist but quickly grab hold of it, ”said Hwang Se-un, senior researcher at the Korea Capital Market Institute.
“This is why the financial industry, once one of the most conservative and reluctant to change industries, is betting big on the future,” he added.
Hwang also said financial companies would gain big by investing in younger clients.
“It can be argued that strategies targeting the MZ generation are somewhat ineffective in increasing profits because the size of their personal assets or income is smaller than the older generation. But the MZ generation will one day become the main source of business income. Companies are therefore making every effort to win their loyal customers in advance. “
Yet concerns loom over one of the latest digital transformations.
The metaverse can be exposed to security risks such as privacy breach and data hacking.
“Of course, the Metaverse has many challenges, however, it is not impossible to solve them. The financial market is adaptive enough to handle the digital innovation triggered by the Metaverse,” Hwang said.