Members of the Kakao chapter of the KCTU's Chemical, Textile and Food Industry Workers' Union hold a picket demonstration Tuesday at Pangyo Techone in Seongnam, Gyeonggi Province, where KakaoBank is headquartered. [Newsis]
Members of the Kakao chapter of the KCTU's Chemical, Textile and Food Industry Workers' Union hold a picket demonstration Tuesday at Pangyo Techone in Seongnam, Gyeonggi Province, where KakaoBank is headquartered. [Newsis]

KakaoBank's labor union has announced a one-day strike for Friday, which would mark the first work stoppage at an internet-only bank since the sector launched in 2017. The dispute over performance pay erupted just after the bank posted a record quarterly net profit, and analysts see it as part of a broader push for profit-sharing that has been spreading across South Korea's labor movement.

According to financial industry sources Monday, KakaoBank's labor and management failed to narrow their differences over the performance compensation structure during this year's wage negotiations. The Gyeonggi Provincial Labor Relations Commission concluded that the gap between the two sides was too wide to continue mediation and suspended the process. The union subsequently held a strike authorization vote, which passed with 95 percent support. No further negotiations have taken place since mediation was suspended, sources said.

The union will proceed with a full-day strike on Friday. Members will use their annual leave and days off to stop work for the day; no separate rallies or offline collective action are planned.

The specific terms under negotiation have not been disclosed, but sources said discussions centered on a salary increase in the 5 to 6 percent range, with the two sides ultimately unable to reach a final agreement.

Tensions within the broader Kakao community first surfaced on June 10, when workers at five affiliates — Kakao Corp., Kakao Pay, Kakao Enterprise, DK TechIn and XL Games — staged a four-hour partial strike. Later that month, more than 2,100 employees participated in a "logout day" on June 29, taking annual leave and disconnecting from internal work systems. KakaoBank's union was not included in those actions but has since secured its own right to strike. At a picket demonstration at Kakao's Pangyo office Tuesday, Seo Seung-wook, head of the Kakao chapter, officially announced the plan for a full-day strike on Friday.

KakaoBank's union members belong not to the Financial Industry Union but to the Kakao chapter of the Korean Confederation of Trade Unions' Chemical, Textile and Food Industry Workers' Union, known as Crew Union. The chapter encompasses workers from Kakao and its major affiliates, with wage bargaining and industrial action conducted separately by each legal entity.

Record net profit, but core business shrinks — Labor and management are at odds over how to measure performance and set the basis for compensation.

KakaoBank's net profit for the period in the first quarter of this year rose 36.3 percent year on year to 187.3 billion won ($127 million), the highest quarterly figure in the bank's history. However, the result was heavily influenced by a 93.3 billion won investment valuation gain from the listing of Superbank, an Indonesian digital bank, booked as non-operating income. Operating profit for the same period fell 13.9 percent to 157.6 billion won, and the net interest margin narrowed to 2.00 percent from 2.09 percent a year earlier.

According to KakaoBank's 2025 annual report on governance and compensation structure filed with the Korea Federation of Banks, average total compensation per employee was 122 million won, up 8 million won from 114 million won the previous year.

The industry expects the outcome of these negotiations to influence other internet-only banks as well. Internet banks employ a high proportion of IT professionals — developers, data analysts and the like — who move frequently between companies, making salaries, bonuses, benefits and promotion structures natural points of comparison. K bank and Toss Bank currently have no separate unions, and open disputes over pay have been relatively rare at those institutions.

Some observers suggest that once the results of KakaoBank's labor negotiations become public, internal discussions about compensation structures could intensify at K bank and Toss Bank as well.

Service disruptions expected to be limited — Even if the strike goes ahead, customers are unlikely to notice significant disruption. Under electronic financial supervision regulations, financial companies and electronic payment service providers must maintain continuity plans ensuring that core financial services are not interrupted even during emergencies such as disasters or strikes. This includes pre-designating emergency support staff to keep essential operations running — covering deposits, transfers, loan repayments and information security — with provisions to redeploy personnel as circumstances require.

KakaoBank plans to maintain core services through pre-designated emergency support staff as stipulated in its collective agreement. "We will respond thoroughly in accordance with our existing business continuity plan to ensure no inconvenience to customers," the bank said. Late July is also a period when many KakaoBank employees take summer vacation, meaning the bank already operates with contingency staffing arrangements in place.

Should KakaoBank proceed with the strike, it would be the first work stoppage at an internet-only bank since the sector was established. Last-minute negotiations remain possible before Friday, but if labor and management cannot reach an agreement, the bank will enter the record books with the industry's first-ever strike.


won@heraldcorp.com