Domestic banks eye foreign customers
By Kim Jae-won
Korean banks are rushing to lure foreign customers as the niche market is growing fast thanks to an increasing number of workers from abroad and marriage immigrants. Foreign residents’ presence in the industry is expanding as their number topped 1.4 million recently.
Local lenders are seeking handling fees for providing foreign exchange transactions. The foreign workers, mostly from China and other neighboring Asian countries, tend to send most of their income home to support their families left behind there.
The banks are also aiming to exercise their globalization skills. Korean lenders plan to expand their offshore business operations, especially in the growing East Asian economies, and they think foreign workers in the nation can work as a litmus test for new products and services.
Korea Exchange Bank (KEB) is the most enthusiastic about expat banking. The nation’s sixth-largest lender by assets already has about 420,000 foreign customers.
It appeals to foreign customers with a broad overseas network in place and abundant experience in dealing with them. The lender’s Omega Service is one example. It offers a comprehensive package for foreign customers who move to Korea from finance and moving to telecommunications and leisure.
The lender acquired by Hana Financial Group in February is preparing to expand its presence in the sector by providing better conditions. KEB recently added the Saudi Arabian Embassy to its customer list by offering benefits for their diplomats.
The embassy initially did business with HSBC Korea. Analysts say the British banking giant’s plan to sell its Korean retail business also affected the decision.
Shinhan Bank is another lender showing great interest in gaining foreign customers. The nation’s third-largest bank set up the Shinhan Bank Foreign Customer Department, a specialized bureau for foreign customers last year and seeks to offer them tailored services.
The lender publishes monthly newsletters containing a wide range of content from finance to tips on living in the country. Foreign employees work to handle customers from abroad and it also runs a call center which provides assistance in seven languages, including English, Japanese, Chinese, Thai and Mongolian.
The financial authorities are also preparing to better support foreign customers. Kwon Hyouk-se, governor of the Financial Supervisory Service said last week that the financial watchdog is urging lenders to release special products for foreign customers.
“We seek to launch services for foreign customers unfamiliar with the Korean banking system,” Kwon said at a meeting with naturalized Koreans in Ansan, Gyeonggi Province.
Nevertheless, foreigners say that Korean lenders have a long way to go to become truly globalized players. They say it is hard to find employees who can speak their language in most branches. Expats also complain that most banks decline to issue credit cards though they have identification indicating their residency and employment here.