[Exclusive] NH Nonghyup Bank to Eliminate Coins at All Branches Nationwide Starting Next Month

Operation of 1,118 'Coinless Stores' Nationwide from November
Accumulate NH Points and Use Like Cash
Available at Hanaro Mart, Gas Stations, and More

Kwon Jun-hak, President of NH Nonghyup Bank

[Asia Economy Reporter Sung Kiho] NH Nonghyup Bank will become the first financial institution to allow customers to accumulate points from coins and other small change at all branches starting next month. Instead of coins, which have become a 'nuisance,' customers can choose to accumulate points that can be used like cash. Points can now be used not only for financial transactions but also for online and offline shopping. As this is the first attempt to accumulate points instead of coins, which have been neglected due to increased card usage and inconvenience, attention is focused on whether this will spread to other banks.

According to the financial sector on the 29th, Nonghyup Bank will apply the method of accumulating NH points instead of coins at 1,118 branches nationwide (as of the 28th) starting next month. Although the Bank of Korea is conducting a 'change accumulation service' for financial institutions, this is the first time a bank is independently providing such a service.

The core of this service is to allow customers to accumulate points from the small change generated after financial transactions at Nonghyup Bank branches. Customers can use the accumulated points for 13 services at the bank counter, including fee payments, product subscriptions, and overseas remittances. From next year, the bank plans to expand the use of points like cash to more areas such as passbook reissuance and continuous insurance premium payments.

The scope of use will also be expanded beyond bank transactions to Nonghyup’s financial and distribution companies. From next year, NH Nonghyup Life Insurance, NH Nonghyup Property & Casualty Insurance, NH Investment & Securities, NH Nonghyup Capital, and NH Nonghyup Savings Bank will allow the use of NH points for loan interest and subscription service payments. Through linkage with NH Members, points can also be used at Nonghyup Mall, Nonghyup Gas Stations, and Nonghyup Hanaro Mart. This means that small change generated from bank transactions can be used for online and offline shopping as well.

Nonghyup Bank expects this service to significantly reduce the use of small change itself. According to the Bank of Korea, as of September this year, the estimated number of coins held per person is about 454. For a family of four, this means more than 1,800 coins are stored in one household. Because so many coins do not circulate in the market, the Bank of Korea and the Korea Minting and Security Printing Corporation spend considerable costs annually on coin production. Over the past 10 years (2011?2020), the cost of coin production alone has reached 467.4 billion KRW.

Since September last year, the Bank of Korea has been providing a service to deposit change into bank accounts for 17 financial institutions and 3 distribution companies. However, as of the second quarter of this year, the cumulative number of uses and amount were only 6,162 cases and 37.36 million KRW. Considering that the three distribution companies operate 8,000 stores nationwide, this means many stores have never provided the service.

In the financial sector, this service is seen as a result of the digital transformation (DT) initiatives promoted since the inauguration of Kwon Junhak, president of Nonghyup Bank. In fact, the 'coinless branch' was selected as a DT task in the first half of this year, and the results have been applied in the field in less than a year.

President Kwon stated, "Nonghyup Bank will continue to develop customer-centered platforms, thinking about customers from small aspects of daily life."