Banks follow the money to church and hope for data
A churchgoer has been attending online services for three consecutive weeks due to the coronavirus pandemic. Recently, she was informed of a new initiative at her church: online banking services for church donations.
“Transferring offerings online allows me to make different kinds of donations, which is very convenient,” she said.
Transferring contributions online has become common at churches these days, since religious group gatherings have been discouraged throughout the pandemic. Some people have complained about the online transferal method, saying it is inconvenient, as each type of donation must be sent to its own account. Churches also need to manage the accounts.
In this, banks have spotted a "blue ocean", an untapped market ready to be exploited.
KB Kookmin Bank on Sept. 2 rolled out a mobile app called the “digital gift basket,” receiving applications from 17 churches within two weeks. The service allows people to send money via the mobile app and also to select the design of the digital envelopes that go with the contribution. Users can write in their own prayer titles attached to the donation. Churches interested in this service can register at a KB Kookmin branch.
Hana Bank rolled out its own religious gift donation service, Hana 1Q Mobile Gift. It does not involve downloading an app. The service is accessible through various platforms: a text message, the church’s homepage and a QR code and utilizes open banking. Church members can use the service without creating a new account online.
Woori Bank is in the process of releasing a service that facilitates church donations.
The several hundred billion won in annual church donations is driving the interest in providing the services to the banks. Donations occur weekly, which means a guaranteed volume of transactions. Banks can promote their mobile gift services and partner with large churches to attract a large number of members as their customers.
Banks are not only interested in the cash flow from churchgoers but also the data on their donations. They are wondering whether religious donations will be included in the MyData program, a state-backed initiative that allows financial institutions to access a broad range of customers' information.
The financial authorities are set to select operators of the program in early 2021. The new services could unlock the financial information of churches and religious groups that has not been easily available and create a new market targeting more than 10,000 houses of worship. Kakao Pay is looking into expanding partnerships with administrative management agencies for churches.
BY SUNG JI-WON [firstname.lastname@example.org]
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