Concerns Over Excessive Competition Ahead of Pilot Service on Next Month 1st
Some Bank Employees Assigned 80 Clients Each... "Excessive Performance Pressure" Criticized
FSS Raises Concerns Over 'Excessive Competition and Personal Information Leakage'
[Asia Economy Kim Jin-ho] Jeong Min-su (38, pseudonym), who works at branch A of a major commercial bank, has recently been encouraging customers at the counter to participate in the ongoing ‘MyData Event.’ He has already shared the event page with relatives, acquaintances, and even people two or three degrees removed. He also never forgets to ask them to include his name as the referring employee. The reason is the recently assigned performance targets. Jeong said, "They even created additional (personnel evaluation, etc.) bonus points based on performance," adding, "It’s so intense that I wonder if they really have to push employees this hard."
With the pilot service of ‘MyData’ set to launch on the 1st of next month, bank employees are suffering from performance-related stress. Fierce competition to attract customers is underway for the MyData business, which is regarded as a future growth engine, and employees must meet assigned targets. Financial authorities, concerned about excessive competition and personal information leaks, have decided to advise banks to exercise restraint.
According to the financial sector on the 10th, major commercial banks are conducting pre-registration events ahead of the MyData pilot service launch on the 1st of next month. Some banks are offering expensive prizes such as Starbucks gift cards, the latest smartphones, and luxury cars to attract customers. This is part of an intense behind-the-scenes battle to secure market dominance. The more market share they capture, the more diverse asset management services based on extensive data become possible.
Given the situation, some banks have even set quotas per employee at each branch. Branches of Bank B located in major areas of Seoul have been instructed to secure 70 to 80 customers per employee. Employees, fearing that failing to meet quotas will result in lower Key Performance Indicator (KPI) scores and disadvantages in bonuses or promotions, are reluctantly pushing hard to meet their targets.
The financial sector points out that the situation ahead of the MyData launch resembles the excessive competition among banks during the 2016 Individual Savings Account (ISA) period. Back then, fierce competition occurred with quotas assigned per employee, but the reckless focus on sales led to the so-called ‘empty account’ controversy. As a result, financial authorities conducted a full investigation of ISA sales across all banks due to concerns about incomplete sales practices.
The Bank B labor union has protested, demanding accountability from management. While acknowledging the importance of MyData as a future growth business, they criticized the arbitrary marketing approach of assigning quotas just before the launch. Internally, there is also criticism that this is pressuring employees to boost short-term performance in an outdated manner. A union official said, "Those responsible for the lack of prior preparation should be held accountable," adding, "If this is an important business, shouldn’t there have been more thorough preparation years ago?"
Financial authorities have also begun to take measures. The Financial Supervisory Service (FSS) has expressed concerns that excessive prize offerings and employee quotas could trigger controversies over excessive competition. A senior FSS official said, "After assessing the specific situation, we will send signals (such as restraint or prohibition) to all banks," adding, "Since blindly pushing for sign-ups could cause various side effects, we plan to guide banks to refrain from excessive competition for now." He further noted, "Although financial companies have excellent IT systems, hacking incidents still occur, so consumer information leakage remains the most worrisome issue."
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