Kookmin Bank Relieved by 2-Year Extension of Budget Phone Contract... "Additional Conditions Specified Reflecting Union Concerns"

Financial Services Commission Specifies Existing Additional Conditions to Prevent Excessive Performance Competition
"Services Must Be Provided Through Non-Face-to-Face Channels"

[Asia Economy Reporter Park Sun-mi] KB Kookmin Bank's financial and telecommunications convergence budget phone service 'Liiv M,' which was designated as the first innovative financial service two years ago, has succeeded in a two-year extension despite discord between labor and management.

On the 14th, the Financial Services Commission announced that it had decided to extend the designation period of KB Kookmin Bank's Liiv M project as an innovative financial service for two years. Liiv M is a financial and telecommunications convergence service launched in December 2019 after KB Kookmin Bank became the first bank to receive approval for an innovative financial service from the Financial Services Commission in April 2019. On the day marking two years since its designation as an innovative financial service, the Financial Services Commission held a meeting to decide whether to re-designate the service.

The Financial Services Commission stated, "KB Kookmin Bank was designated as an innovative financial service for its financial and telecommunications convergence budget phone service, but as the designation period was about to expire, it requested an extension. Considering the need for additional time to advance the financial-telecommunications linkage system and launch bundled financial products, the designation period was extended by two years."

It added, "There had been differences in opinion between labor and management at KB Kookmin Bank regarding the excessive performance competition prevention condition imposed when the innovative financial service was first designated. The Innovative Financial Review Committee has actively urged labor and management to negotiate," and "after comprehensively considering the opinions raised by labor and management, financial consumer protection, and financial order stability, it was decided to specify and supplement the existing additional conditions."

The Financial Services Commission first specified the existing additional conditions related to preventing excessive performance competition. Also, to protect financial consumers currently using the budget phone service and to provide the service stably without disagreement between labor and management, the service will be provided through non-face-to-face channels during the extension period, but for digitally vulnerable groups, face-to-face services may be provided through mutual consultation between labor and management.

The Financial Services Commission explained, "This takes into account that 98% of KB Kookmin Bank budget phone subscriptions are made through non-face-to-face channels, with only about 2% through face-to-face channels."

Furthermore, to facilitate future digital innovation, the additional conditions include the spirit of active cooperation between labor and management. The additional conditions contain provisions to prevent coercive acts that induce mobile phone sales or subscription to fee plans when selling financial products and to thoroughly implement internal control measures so that telecommunications business is not excessively handled at bank counters beyond its core duties. Specifically, these include ▲ prohibition of reflecting regional group representative performance evaluations ▲ prohibition of posting secret performance charts (rankings) ▲ prohibition of disclosing subscription status by individual employees ▲ prohibition of forced sales due to verbal pressure from branch managers.