"Major Post Offices Nationwide to Offer Bank Loan Products Starting Next Year"

Financial Services Commission Designates New Innovative Financial Services
Major Post Offices Nationwide to Offer Bank Loan Products, Enhancing Consumer Accessibility

In the first half of next year, loan products from the four major banks (KB Kookmin, Shinhan, Woori, and Hana) will be available for sale at approximately 20 main post offices nationwide.

Major Post Offices Nationwide to Offer Bank Loan Products, Enhancing Consumer Accessibility

The Financial Services Commission announced on the 21st that, at its regular meeting held on the 17th, it newly designated as innovative financial services the "bank agency services through bank work delegation" (14 cases) involving KB Kookmin Bank, 12 other financial institutions, and Korea Post, as well as the "interest rate reduction request proxy service utilizing MyData" (19 cases) involving KB Kookmin Bank and 18 other companies.

Recently, concerns have been raised about reduced financial accessibility for the elderly and other digitally vulnerable groups due to the decreasing number of physical bank branches. To address this, the Financial Services Commission has been promoting the introduction of bank agency services to enhance consumer access to financial services. Until the formal adoption through the revision of the Banking Act, a pilot program will be operated, with the four major banks (KB Kookmin, Shinhan, Woori, Hana), Korea Post, and nine savings banks (Dongyang, Moa, Central, Oseong, SBI, Incheon, JT Chinae, Jinju, and Hanseong) designated as innovative financial service providers.

Previously, it was restricted for banks to delegate core work such as entering into or terminating deposit and loan product contracts to third parties. However, with the designation of this innovative financial service, banks can now delegate such work to post offices and savings banks (hereinafter referred to as entrusted institutions), enabling consumers to access banking services at entrusted institutions even in areas without bank branches. However, entrusted institutions will not handle all bank work; rather, they will perform customer-facing tasks such as consultations, receiving transaction applications, and contract execution on behalf of banks.

The Financial Services Commission expects that this service will not only increase the number of channels through which consumers can access banking services in person, but also allow them to compare a variety of financial products face-to-face, thereby enhancing convenience. If an entrusted institution partners with two or more banks, consumers will be able to compare interest rates and other features of various deposit or loan products in person at a single location and select the product most advantageous to them.

The Financial Services Commission has also established safeguards to ensure consumer protection, such as requiring contracts to clearly state that legal liability, including compensation for consumer damages, fundamentally lies with the delegating bank. In addition, it emphasized that banks will be restricted from closing nearby branches for the purpose of operating bank agency services, thereby preventing the use of bank agency services as a means to close bank branches.

Based on these designations of innovative financial services, the Financial Services Commission is preparing, together with the four major banks, Korea Post, and the Korea Financial Telecommunications & Clearings Institute, to pilot the bank agency service. The current plan is to begin selling the four major banks' loan products (such as personal credit loans and policy-based financial products for low-income individuals) at approximately 20 main post offices nationwide in the first half of next year.

Implementation of Interest Rate Reduction Request Proxy Service Utilizing MyData

The Financial Services Commission also announced the implementation of the interest rate reduction request proxy service utilizing MyData.

Although various institutional efforts have been made to enhance the effectiveness of the interest rate reduction request system-such as proactive notifications to borrowers who may be eligible for rate reductions (semiannually) and disclosure of acceptance rates (semiannually)-the number of applications, acceptance rates, and total interest reductions have been declining since last year.

The main reason identified for this downward trend is that many borrowers are unaware of the existence or application process for the interest rate reduction request due to being busy with their livelihoods, resulting in underutilization.

Going forward, personal MyData service providers (AI Agents) will be able to exercise the interest rate reduction request on behalf of borrowers for their personal loans. If a borrower, busy with work, gives one-time consent for proxy application, the MyData service provider will automatically apply for an interest rate reduction whenever it determines that the borrower may be eligible, even without further direct action by the borrower. If the request is not accepted, the provider will identify the reason and inform the borrower of the necessary steps for approval.

This service will be launched for personal loans from 13 banks starting in the first quarter of next year. Depending on the operational status in the banking sector, the service may be gradually expanded to savings banks and other secondary financial institutions through further consultation.

A Financial Services Commission official stated, "Through the designation of these services, we expect to ease the interest burden on financial consumers and promote inclusive finance by leveraging technologies such as AI and data."