Bank 4.0: Banking Everywhere, Never at a Bank

by Brett King

In July 2017, Kakao, a Korean internet platform that has the largest messenger app in the country and runs a service like Uber called Kakao Taxi, launched their own internet-only bank—Kakao Bank. In just five days Kakao had opened more than one million accounts5, attracting over half a billion US dollars in deposits, and they claim they would have been able to open more had their technology not been overwhelmed by the demand. This is increasingly the standard the new internet banks are being held to, but Kakao, Tencent, Amazon, Uber and Alipay have advantages over digital pure play and incumbents alike. They can apply network effect from their existing platforms to functions like deposit taking and payments. It’s not just that they have access to millions of customers, but that those customers will use their networks for payments, commerce and other bank-like stuff. When those platforms start to offer banking utility, it’s an obvious evolution of their network utility.