Economic Essay Contest Dear Mirfayz: Result of my search for better financial system in Korea
These days, more and more people around us are going on overseas trips. But when they start preparing for the trip, they often face unexpected problems. One of the biggest issues is money. How much cash should they bring from Korea? Can they use their Korean card abroad? If so, how much are the fees?
Even though it’s just a short trip, there are many things to think about. Of course, opening a local bank account in another country is nearly impossible. We often feel burdened by minor financial inconveniences during short trips abroad. So how much more complicated and challenging must it be for foreigners who have to manage their finances while living in Korea for an extended period?
To show what kind of problems they face, I want to share the real story of my friend Mirfayz. He’s a student from Uzbekistan, and we became friends in a liberal arts class. One day, he sent me a text message in a panic. “20,000 won disappeared from my account to a bank I don’t know. I think I’ve been hacked. What should I do?” He also sent me a screenshot. It showed that the money had been transferred to an account called “Cheongyak Jonghap,” which is a housing subscription savings account in Korea.
I thought it was just a mistake and that someone else’s housing account was linked to his bank account. The next day, I went with him to the bank to help get the money back. But we learned something surprising. The account in the screenshot wasn’t someone else’s — it was actually Mirfayz’s own account. He had no idea he even had a housing subscription account. In fact, he didn’t even know what that kind of account was. It turned out that when he opened a regular savings account, a housing subscription account was also opened at the same time.
Because he didn’t know how the Korean banking system worked, he agreed to the terms and conditions without fully understanding them. Without realizing it, he agreed to open the housing subscription account and set up an automatic transfer of 20,000 won every month. His face showed both confusion and anger. But at that moment, all we could do was help him get back the 120,000 won that had been transferred over the past six months.
This kind of experience shows that the problems foreigners face when managing money in Korea go beyond just language issues. To fix this, both the government and financial institutions need to work together and AI technology can help a lot. So what can bank and the government do to better support foreign customers?
First, banks in Korea could make MOU with major banks in other countries. With the customer’s permission, they could receive financial data from the customer’s home country. This would make it easier to open a bank account in Korea without complicated documents.
Also, AI could analyze the person’s financial behavior in their home country and recommend the right financial products in Korea. People’s spending and saving habits usually don’t change much just because they move to another country. So this kind of system could help match them with services that suit them.
While banks could use AI to attract customers, the government should help foreigners understand and choose the right financial products.
The best way might be to build an AI-based financial checkup system for foreigners. This system could ask simple questions to find out a person’s financial knowledge, preferences, how long they’ll stay in Korea, and how much risk they are willing to take. Based on this, it could recommend products suitable for the customer. Although banks could offer this kind of service, it might not be fully trusted. It would be more trustworthy if it came from the government, since it is neutral and not trying to sell anything.
After the housing account incident, Mirfayz still doesn’t trust the Korean banking system. He still thinks his money was taken by a hacker, so he made a new bank account. I told him it wasn’t hacking, but he still felt worried and couldn’t stop doubting it. In the end, all I could do was help him open another account.
Mirfayz is planning to return to Uzbekistan after graduating from university. If a government-led financial checkup system had existed in Korea, it would have told him that he didn’t need to open a housing subscription account.
Also, if Korean financial institutions had signed MOU with foreign banks, he could have been recommended financial products that actually suited his needs — instead of a housing account. He could have opened a bank account easily without needing my help as well. If this kind of AI-based collaboration between financial institutions and the government becomes a reality, then people like my friend Mirfayz will finally be able to manage their finances in Korea with confidence and peace of mind.
Kim Tae-young is a student at Kyung Hee University.