Banks plan to enhance online services

By Choi Kyong-ae

Korea will introduce an enhanced online banking service later this year that will enable consumers to look up their accounts in 16 domestic banks, transfer money between them and close accounts, the Financial Services Commission (FSC) said Monday.

In the so-called Account Info service, the first of its kind in the global banking industry, customers won’t need to make a visit banks with which they trade to find what bank balance they have, send money from one bank to the other and will be able to close their accounts with one click, the financial regulator said.

“The Export-Import Bank of Korea will be exempt from the subjected banks because it does not make financial transactions with individuals. Non-banking lenders such as merchant banks and savings banks are not subject to the planned service,” FSC official Kim Yoon-hee in charge of the service introduction said.

She said the service is largely aimed at helping customers find if they have any hibernated, or unused, bank accounts and close them if necessary. Korean grown-ups reportedly hold an average of 5.4 bank accounts per person, much higher than 2 held by their counterparts in advanced countries.

As banks do not require hibernated account holders to pay for maintenance of the accounts in Korea unlike developed nations, nearly half of bank accounts generated for deposits and withdrawals are in the state of hibernation at the end of 2015, according to FSC data.

The data also shows that the value of deposits in the hibernated accounts reached a total of 5.5 trillion won, or an average of 150,000 won per account holder.

The Account Info service, which will be available as early as in the fourth quarter, is an extended approach by the financial authorities to promote consumer convenience in banking services.

Late last year, Korea launched the “Pay Info” service to allow customers to relocate all the information needed for automatic withdrawal services from their existing banks to new ones.

“Currently, the Pay Info service is available only in the website of www.payinfo.or.kr but it will be available at bank outlets and through mobile banking,” said the FSC official. “From June, automatic withdrawal services will go beyond credit card, insurance and telecommunication industries into nearly all industries.”

The landscape of banking industry is rapidly changing due to customers’ preference for transactions through mobile banking over traditional bank outlets. Declining interest rates have been another blow to banks, squeezing their margins further.

In recent years, banks have increasingly joined hands with information-technology companies to meet customers’ changing appetite in the ‘fintech’ trend. They are also looking further to overseas markets to secure a new growth engine in emerging markets away from an already saturated domestic market.