Following failed attempts at physical operations abroad, Korean banks are trying again to expand overseas, this time by focusing on tech-savvy consumers.

They have ditched their Korean names and brick-and-mortar branches in foreign countries, targeting young consumers instead with mobile banking services. 

Shinhan Bank is better known as Sunny Bank in Vietnam. Sunny Bank runs as a mobile financial application providing credit loans, foreign currency exchange, overseas money transfer and credit cards.

Within the four months following its launch in December, Sunny Bank attracted about 20,000 Vietnamese subscribers, according to the bank.

Around 90 percent of the subscribers are in their 20s and 30s -- Shinhan’s target group in the foreign country.

“Sunny Bank is not just a fintech service, but a ‘fintents’ service,” said a spokesman at the bank. “Content ranging from fashion to culture are combined with the financial service, coining a new word ‘fintents,’ a new mobile business model.”

With the Sunny Bank app, Vietnamese users create deposit accounts at Shinhan Bank, view the accounts, pay for online purchases, apply for mortgages and car loans and transfer money to acquaintances abroad. To appeal to the Vietnamese, it also provides content related to Korean fashion, cosmetics, food and celebrities.

Sunny Bank’s main model is Sunny from Girls’ Generation, one of the top girl groups in Korea that is highly popular in Southeast Asian countries including Vietnam.

“Sunny Bank, which implies warm finance service, is winning young people’s interest much more easily than using the real bank name,” said a staff in charge of mobile strategy at Shinhan.

Shinhan Bank has won approval from the Vietnamese financial authority to open four bank branches in the country, which will back the mobile service, allowing it to run smoothly. The bank plans to expand the physical branches to 18, aiming to form the largest foreign bank network in the country.

“We are considering more Asian countries where we know the markets deeply and a number of Korean businesses are operating,” said the bank employee.

Woori Bank is rebranding itself as WiBee Bank. The competitor to Shinhan’s Sunny Bank is expanding its presence from Cambodia to Indonesia, Vietnam and Brazil.

Woori Bank is targeting these countries with its mobile service, as they have fast-growing smartphone markets compared to stagnant growth in advanced countries.

WiBee Bank currently offers loan application and currency exchange services.

A distinct strategy of Woori Bank’s mobile overseas expansion is to localize by using the languages of the countries it enters.

In Indonesia, the bank is using “Lebah,” which means the bee in the local language, together with the Wibee brand. It uses “Ong mat” in Vietnamese and “Ahelha” in Brazilian.

In China, the mobile service is named “You li Bao,” meaning growing wealth. The bank is working to establish a mobile platform for Chinese customers at the moment.

Woori Bank also launched the banking industry’s first mobile messenger WiBee Talk in four different languages. It runs in English, Chinese, Vietnamese and Indonesian, allowing WiBee Bank users in those countries to chat with their friends and bank employees via the channel.

“It is easier to reach foreign customers with their mother tongues and fancier brand names than our original bank name,” said Jang Choong-sik, the head of PR affairs at Woori Bank.

By the first half of 2017, Woori Bank plans to introduce mobile pay, account creation and money transfer services in its target markets, completing the bank’s global mobile banking business.

KEB Hana Bank launched 1Q Bank in Canada last year and the same service in China in May. The bank chose Canada as a test market for its mobile business, as it runs 11 branches in the country, operating there for the past 33 years.

The 1Q Bank, with the Q standing for “quick” and “quality,” allows Canadian customers to create bank accounts without being physically present at bank branches, apply for loans and transfer money.

“It was the first direct banking service tried by a Korean bank in another country,” said a spokesman at KEB Hana. “We chose Canada where non-face-to-face verification was legally approved in the banking sector, and found the strategy successful.”

The number of newly created accounts through 1Q Bank in Canada hit 20,000 as of June, according to the bank. KEB Hana Bank now has its eye on China with a plan to double its Chinese customers from the current 120,000 with the 1Q Bank service by 2017.

KB Kookmin Bank is set to introduce Liiv, a mobile service that specializes in daily financial activities including peer-to-peer payment, in Cambodia, the first foreign country to implement its global digital banking plan. Liiv stands for life-styling, integrated, interesting and valuable.

“A distinction in our mobile strategy from other banks’ is that we are going into users’ daily financial life,” a PR manager at the bank said.

The Liiv application comprises of a calendar, personal ledger, travel card and banking service. It also allows users to manage money without cash transactions.

By Song Su-hyun (song@heraldcorp.com)