[One Month Since the Financial Consumer Protection Act] The 'Time of Patience' for Product Enrollment... Encouragement to Complete Online Procedures

No Guidelines Leads to Desperate Measures
Product Description Papers Increase, Going Against the Times
Establishing Safe Financial Products Remains Elusive

[Asia Economy Reporters Kiho Sung, Seungseop Song] "The atmosphere at branches has completely changed compared to before the Financial Consumer Protection Act came into effect. Even when customers complain about the complicated and lengthened product sales procedures, we can only apologize. With continuous additional guidelines to learn and work to do, it feels like having ten bodies wouldn't be enough." (A bank teller at Bank A in Jung-gu, Seoul)

On the 19th, one month before the enforcement of the Financial Consumer Protection Act (March 25), frontline branches of commercial banks still voiced concerns and complaints. Employees, lacking clear guidelines, had to request confirmation from headquarters when issues arose during product explanations or contract preparations, or felt uneasy when unable to explain properly. They also continued to face difficulties calming customers who complained about the extended product subscription time. A representative from Bank B in Yeouido, Seoul, said, "Our branch has only three employees qualified to sell funds, so other department staff cannot assist. Although authorities ask for simplification, we explain products via FM due to liability concerns in case of future losses."

In some branches, customers were advised to complete procedures online, saying there was no need to listen to explanations from branch staff one by one. A representative from Bank C in Seodaemun-gu, Seoul, hinted, "After the Financial Consumer Protection Act, to subscribe to an Individual Retirement Pension (IRP), you have to call the National Health Insurance Service and receive related documents by fax. If you subscribe via the mobile application (app), you don't need to receive confirmation documents, so we are requesting customers to handle it entirely online."

The anticipated establishment of ‘safe financial products’ remains distant. A financial holding company official lamented, "All departments related to the Financial Consumer Protection Act are currently focused on customer response and reviewing existing products," adding, "There is no capacity to create new products."

Sales have also been disrupted as so-called ‘tying’?subscribing to funds or insurance products within one month before or after taking out a loan at the same bank?has become difficult. The financial sector demands improvements, calling the current measures excessive, but the Financial Services Commission refuses to ease restrictions, stating that loans can be bundled with other financial products.

Field sales staff complain about excessive workloads. An auto insurance salesperson at Insurance Company D said, "Time is critical in this job, but explanation times have significantly increased, and the documents we have to carry have nearly doubled. The number of branch visits has also increased, causing not only fatigue but also a heavy burden on sales."

There are also criticisms that these measures run counter to ESG (Environmental, Social, and Governance) initiatives actively promoted in the financial sector. A bank employee said, "Although explanations can be given using videos or tablet PCs, many elderly customers prefer paper. Even when selling non-investment products such as deposit and withdrawal or subscription savings accounts, document delivery is required. Even if we send texts or emails, customers may claim they did not check them, so paper usage is expected to increase significantly for the time being."

Confusion is expected to continue as detailed guidelines from financial authorities have yet to be established. A financial sector official said, "The financial authorities and related industries have formed an implementation task force and are responding accordingly, but it will take much more time to reduce confusion on the ground," adding, "Even after detailed guidelines are created, additional suggestions and complaints will inevitably continue to arise."