Value context and insight. lkm@koreatimes.co.kr
Bankbooks becoming thing of past
By Lee Kyung-min
By Lee Kyung-min
The number of newly issued bankbooks has been decreasing sharply over the past few years amid the increase in paperless financial transactions, according to data from the Financial Supervisory Service (FSS) Sunday.
About 27 percent, of bank account holders had no bankbooks in 2018, a three-fold increase from 2015, when only 9 percent did, the data showed.
Similarly, the number of bankbooks issued by the nation's top five commercial banks ― Shinhan, KB Kookmin, Woori, KEB Hana and NongHyup ― are steadily declining.
They issued a combined 28.65 million bankbooks in 2018, a 1.4 million drop from over 30.05 million in 2017. This was a further drop from 32.57 million in 2016.
This year's figure is expected to fall far faster given the January-March period is known to attract the highest number of new customers.
The five banks issued only about 7.2 million bankbooks in the first quarter, about 10 percent fewer compared to 2018.
Banks are offering various incentives to help customers join the eco-friendly initiative.
In March 2018, KB Kookmin Bank rolled out a new product that gives 0.1 percent more in annual interest rates to those who chose not to issue a bankbook.
Other banks exempt them from paying a cash wire transfer fee.
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Similarly, the FSS is expected to charge about 2,000 won ($1.6) to those who want to issue bankbooks starting September 2020, except for those aged 60 and older with limited access to online financial services platform.
“Other than senior citizens, many of whom do not use smartphones or computers to check balance or cash transfer history, banks will not issue bankbooks as much as they used to,” a FSS official said.
Some senior citizens often fear that they will not be able to withdraw cash without a bankbook, but the worry is baseless because transaction records and balances are all preserved electronically.
The FSS has implemented the move in phases to help banks become paperless since 2015, in line with continued decrease in the number of bankbooks issued.
Meanwhile, Korea may become a society with paperless financial transactions faster than previously thought.
According to a survey by the Bank of Korea (BOK) of 1,100 households between Oct. 22 and Dec. 5, 2018, they had 33 percent less paper cash compared to three years earlier.
As for the reason for not holding cash, over a third, or 38.7 percent, said they felt a decreasing need after the development of convenient cash transfer services.
Some 14.3 percent said there are fewer goods that require cash to purchase.