'Is Transfer Only Possible During Bank Business Hours?' Controversy Over Operating Hours for Debt Refinancing

Service Restrictions During Bank Business Hours
Conflicting Opinions Between Financial Companies and Fintechs

[Asia Economy Reporter Kiho Sung] As the debt refinancing (loan switching) platform promoted by the government is set to launch in October, controversy has arisen over its operating hours. Opinions differ between existing financial companies and fintech firms regarding limiting the service to bank business hours. Additionally, clear conflicts of interest over fees between financial companies and the platform providers are expected to cause friction before the debt refinancing service is implemented.

According to the financial sector on the 17th, the Korea Financial Telecommunications & Clearings Institute held a briefing session on the debt refinancing platform on the 10th with 12 private companies (Finda, Viva Republica, NHN Payco, Rainist, Fink, MyBank, Pinset, Fintech, TeamWink, Pinmart, Kakao Pay, SK Planet) and 4 related associations (Korea Federation of Banks, Korea Inclusive Finance Agency, Korea Credit Finance Association, Fintech Industry Association).

According to the roadmap revealed at the briefing, participation will begin with banks in October, followed by secondary financial institutions such as savings banks and capital companies in December, with all parties expected to join by early next year at the latest. Pilot operation will start in October, with full-scale operation commencing in the first half of next year.

Once the platform is established, consumers will be able to compare loan conditions from various financial companies and freely switch to other loans. As information such as individual loan periods and interest rate conditions is disclosed, fierce competition within the financial sector is anticipated.

However, even before the service launch, differing opinions have emerged between existing financial institutions and platform companies regarding the operation method. The most controversial issue is the operating hours of the debt refinancing platform service. During the pilot operation starting in October, it is planned to operate from 9 a.m. to 4 p.m. and only on bank business days.

Fintech Firms: "Non-face-to-face Service Should Be Available 24 Hours"

Companies preparing the debt refinancing platform are concerned that limiting service hours to bank business hours will reduce consumer participation. They argue that since it is a non-face-to-face service, it should be available 24 hours for consumer convenience. On the other hand, banks have reportedly requested limiting the service to business hours citing security and interest-related issues. Financial authorities plan to operate only during bank business hours during the pilot period and then reconsider the schedule afterward.

A fintech company official pointed out, "The success or failure of the debt refinancing platform service will depend on initial usage rates," adding, "Since bank online services are available 24 hours a day, 365 days a year, operating the service based on branch office hours could hinder the platform's activation momentum, considering the working hours of office workers and others."

Commission rates remain a contentious issue. The core concern is the commission rate between financial companies and the platform providers facilitating loan switching. Frequent loan transfers could increase intermediary fees for platform providers. Early repayment fees are also under discussion. If financial companies set high early repayment fees, switching loans itself becomes difficult. There are opinions that early repayment fees should be set at an appropriate level to promote service activation.

Meanwhile, Naver Financial, known to be participating in the debt refinancing platform, stated that no final decision has been made. Naver Financial is currently conducting internal discussions regarding participation. Recently, Naver Financial did not attend the briefing session.