Bank Agency Services to Be Expanded
FSC Announces Measures to Improve Financial Accessibility
From now on, it will be possible to open accounts at commercial banks and subscribe to savings and deposit products at post offices or other financial institutions. Furthermore, loans from commercial banks will also be available at post offices.
The Financial Services Commission (FSC) decided to introduce the "bank agency" system to address concerns about reduced financial accessibility due to the closure of local branches in depopulated areas and the strengthening of non-face-to-face services.
On the morning of the 27th, the FSC announced the "Plan to Activate Bank Agency Services" and revealed these details. The FSC plans to implement the essential agency services of banks through amendments to the Banking Act, and until the law is amended, basic face-to-face services such as consultations and application submissions conducted at bank branches will be pilot-operated within this year through designation as innovative financial services.
The bank agency system will operate under a licensing system considering financial consumer protection and risks. Operators will be allowed from financial sectors such as banks, corporations where banks are the largest shareholders, mutual finance, and savings banks.
Whether to allow bank agency services to general corporations engaged in non-financial businesses, such as convenience stores, will be reviewed later if necessary. However, internet-only banks that cannot conduct face-to-face sales will not be permitted to operate bank agency services.
The scope of bank agency services will be expanded step-by-step. In the first phase, contract conclusion and termination related to savings and deposit and foreign exchange transactions will be allowed. This includes consultations for subscribing to savings, deposits, and loans, document collection, issuance of balance certificates, and balance inquiries based on deposits.
For example, if Shinhan Bank opens a "bank agency" branch, customers can subscribe to financial products from Hana Bank or KB Kookmin Bank. It will also be possible to subscribe to and terminate first-tier financial products at post offices or secondary financial institutions.
The essential operations of banks cannot be delegated. Although the current Banking Act defines bank agency services through "agency branches," it is difficult to consider bank agency services permitted because there are no detailed regulations such as entry restrictions.
If the Banking Act amendment bill is prepared and passed, it is expected that loan services such as mortgage loans will also be possible at bank agency branches. The post office, having experience in handling deposit and payment services on behalf of banks at over 2,500 branches nationwide, plans to allow loan services.
Bank agency operators will be regulated at the same level as financial product sales agents and intermediaries under the Financial Consumer Protection Act, following the "same act-same regulation" principle. If a bank agency operator causes damage to financial consumers during bank operations, the bank must directly compensate for the damage. Agency operators will be subject to the bank's internal controls. Banks will supervise them independently, but if a financial accident occurs, the Financial Supervisory Service will conduct an inspection.
The FSC plans to consult with banks and prospective operators on business methods in the second quarter and designate bank agency services as innovative financial services based on the Financial Innovation Act in July. The Banking Act amendment bill is expected to be prepared by September at the latest. The first bank agency operator is expected to emerge as early as the end of the year.
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