FSS Holds 8th "Fair Finance Promotion Committee"
Plans to Improve Banking Services for Foreign Residents
Measures Discussed for Enhanced Loan Rate Notifications and Mobile Branch Operations
The Financial Supervisory Service (FSS) announced plans to improve inconveniences faced by foreign residents in South Korea when conducting bank transactions.
On the 9th, the FSS held the 8th "Fair Finance Promotion Committee" meeting and reviewed three tasks: improving inconveniences in foreigner bank transactions, strengthening notifications on changes in loan interest rates in the savings and mutual finance sectors, and enhancing the operation of mobile branches of commercial banks.
According to the FSS, the number of foreign residents in South Korea is reaching record highs every year, and the number of foreign customers at domestic banks continues to increase. Nevertheless, important documents required for banking transactions are often not provided in foreign language translations or are only available for in-person transactions, causing various inconveniences for foreigners.
Some banks do not support foreign language services on their mobile apps or have difficulties with entering English names for identity verification. In response, the FSS emphasized that by the end of this year, banks will prioritize preparing English translations of important application documents and provide them through mobile apps as well.
Additionally, the FSS announced plans to expand English services on bank mobile apps and increase the number of characters allowed for English name input to facilitate non-face-to-face identity verification. They also explained that detailed information on languages provided and services available at foreigner-specialized branches will be made available on the Korea Federation of Banks and bank websites.
During the committee meeting, measures to improve detailed notifications regarding preferential interest rate conditions and fulfillment status when loan interest rates change in savings banks and mutual finance sectors were also discussed.
This is because some savings banks or mutual finance institutions do not distinguish between base interest rates and additional interest rates when changing variable interest rate products, or fail to notify customers of the interest rate change or the previous interest rate. There are also cases where preferential interest rate conditions and fulfillment status are not communicated for products applying preferential rates for ancillary transactions or diligent repayment.
Accordingly, the FSS stated it will guide banks to provide notifications that include distinctions between base and additional interest rates, the fact of interest rate changes, and the interest rates before and after the change for variable interest rate products. For products with preferential interest rates, detailed information on the conditions and fulfillment status of the preferential rates will also be provided.
The enhancement of mobile branch operations of commercial banks was also discussed. Although mobile branches are operated mainly by the four major commercial banks as a measure to improve accessibility for the elderly and others, they have been criticized for lacking systematic operational strategies, being run as irregular event-based or sales-oriented services, and being concentrated in the metropolitan area, thus falling short of functioning as substitute branches. Therefore, a plan was discussed for each commercial bank to establish detailed annual operation plans for mobile branches (including those for public interest purposes) and report these to management.
Kim Mi-young, Director of the Financial Consumer Protection Department at the FSS and chairperson of the committee, requested, "With the continuous increase in foreign customers, please actively cooperate with the industry to review various institutional improvement measures to activate financial transactions for foreigners and resolve inconveniences in financial transactions."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
