South Korea’s retail bank loyalty market will grow to $2.6bn by 2035, Spherical Insights & Consulting reported. The market was valued at $1.2bn in 2024, according to Asia Banking & Finance.

The sector will expand at a 7.28% CAGR between 2025 and 2035. The growth comes as Asian lenders retool retention strategies while digital finance replaces physical branches.

Online channels handle roughly 90% of banking transactions in South Korea. Lenders use loyalty programmes to deliver tailored rewards based on spending, history, lifestyle and financial activity.

Banks are linking loyalty schemes directly to mobile apps and AI tools. This allows institutions to offer personalised perks tied to daily transactions and financial milestones.

The Open Banking Framework and the MyData project support development by making customer data portable across institutions. Major lenders including KB Kookmin, Shinhan and Hana use these schemes to cross-sell financial products.

B2C programmes held the largest market share in 2024 and will drive growth through 2035. Large banks dominated the market during the same period, as bigger lenders have the capital to fund app integration, reward payouts and fraud controls. High development costs remain a key hurdle for smaller regional competitors.