Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Internet-only banks criticized for restricting mortgage loans to customers with foreign spouses
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By Lee Yeon-woo
By Lee Yeon-woo
Unlike commercial banks, internet-only banks in Korea do not currently offer mortgage loans to Koreans with foreign national spouses.
On Tuesday, both KakaoBank and K Bank, the two internet-only banks that offer mortgage loans, confirmed to The Korea Times that Koreans cannot apply for such loans if their foreign spouses are listed alongside them in resident registration documents.
During the regular administrative procedure to acquire a home mortgage loan from these internet-only banks, applicants are required to “consent to provide spouse information.” Due to verification issues, however, the banks stated that foreign nationals cannot open bank accounts, nor can they provide the necessary consent to share their spousal details.
This stands in contrast to commercial banks, which not only allow foreign nationals to open bank accounts after verifying them face-to-face with their residence cards but also offer mortgage loans to their Korean spouses.
Another internet-only bank, Toss Bank, permits foreign nationals to open bank accounts using its app. However, it currently does not offer a mortgage loan product.
As the government intensifies efforts to attract foreign nationals to counteract population decline, criticisms are mounting that the banks need to take proactive steps to address these challenges.
“It's been some time since I heard that the financial guidelines of KakaoBank or K Bank would be updated for foreign nationals, but there's still no news. Why is Kakao Pay okay but not KakaoBank? I question if there have been meaningful discussions on this issue,” an online user commented.
KakaoBank and K Bank clarified that they are prioritizing security and safety ahead of the Ministry of Justice's launch of a verification system for foreign residence cards. The ministry aims to introduce the service this year, noting that it will be up to individual financial firms to decide whether to adopt it.
“If we were to carelessly open accounts just for convenience, and if those accounts are misused for illegal activities, it would jeopardize the core foundation of our entire business. So we are approaching this issue with caution,” said a KakaoBank official.
“Attracting more customers is undoubtedly a priority for us. Once the ministry rolls out the new system, we aim to actively ponder over its implementation,” a K Bank official said.