Banks eager to open branches on campus for future customers.
Commercial banks are engaging in a cutthroat race to become the main bank for universities to secure future customers, bank officials said Sunday.
Once selected as a main bank, they can expect stable revenue from operating college tuition. The move also aims to attract future financial customers by opening branches on college campuses.
According to domestic banks, Shinhan and Woori Bank signed a business agreement with 31 colleges apiece to become a main bank and open a branch on their campuses. Woori opened branches at Yonsei and Sungkyunkwan University while Shinhan opened at Hanyang and Konkuk University.
Seoul National University selects its main bank by each school on the campus.
NH NongHyup is the main bank for 20 colleges in Korea. KB Kookmin and KEB Hana Bank also signed with 14 and 12 colleges, respectively.
"Once a bank is selected as a college's main bank, the bank is allowed to install a payment system linked to each student's ID card so students can use them like a debit card. These banks naturally become these students' main bank," said a NH NongHyup Bank official.
"A bank can secure more than 10,000 students as its customers once selected as a college's main bank."
Last month, KB Kookmin Bank signed a business agreement with Sangmyung University to become its main bank. Woori Bank has been the university's main bank for a long time, but KB Kookmin Bank managed to replace them by offering not only an advanced tuition management system for the school but also asset management services for faculty staff.
Sangmyung University student IDs also include a payment system connected to KB Kookmin Bank accounts.
"A university operates a great deal of money. Not only tuition but also donations are a big part of their management of funds," said the official.
"Once a university chooses a bank as its main bank, the deal is usually good for more than 10 years. This is why commercial banks are engaging in a cutthroat race to become the main bank."
In a bid to become a college's main bank, lenders offer various benefits for colleges.
"A donation is one of the most important factors in selecting a main bank," said a local college student council representative who asked not to be named.
"A school also wants banks to feature special loan products with lower interest rates exclusively for professors and faculty staff."