By Kim Jae-won
The Financial Supervisory Service (FSS) issued a warning to KEB Hana Bank, Shinhan Bank and Woori Bank about their overheated competition to attract more customers to their membership clubs, Thursday.
The nation's leading banking groups are giving membership points to new customers, aiming to inspire loyalty in customers amid low interest rates.
To increase their membership clubs, some of the banks are even reaching out to high school students.
As the competition between banks intensifies, the FSS called the vice presidents of the nation's four largest financial groups on Tuesday, asking them not to mobilize their employees to recruit for their membership clubs.
The regulator expressed concerns that cutthroat competition may lead bank employees to spend too much time recruiting more customers while neglecting their duties of customer protection.
"We've received complaints that bank employees are ordered to make 100 customers sign up for their membership clubs," said a spokeswoman at the FSS. "So, we cautioned financial groups not to pressure employees and be careful of the side effects of this activity."
Banking groups have launched such services to bolster loyalty in customers who are disappointed with extremely low interest rates.
Lenders are offering less than 2 percent interest on deposits, as the Bank of Korea lowered its benchmark interest rate to a record low of 1.25 percent in June.
Consumers can buy airline tickets or pay their smartphone bills with membership points collected from the financial groups, provided based on their transactions. Customers can even withdraw cash at ATMs with their points.
Hana Financial Group is leading the trend, having drawn 5.6 million customers to its membership club, called Hana Members, since its launch last October. Members can use their points at more than 100 stores, including S-Oil gas stations and CU convenience stores.
Shinhan Financial Group is gearing up to follow Hana, bringing 550,000 members to its FAN Club membership. Woori Bank also joined the competition by introducing WiBee Members earlier this month.
KB Financial Group plans to launch a similar membership program later this year.
As summer vacation time comes, banking groups are also offering better foreign exchange rates as well as providing tourist insurance free to customers going overseas with the condition of joining their membership clubs.
The Financial Supervisory Service (FSS) issued a warning to KEB Hana Bank, Shinhan Bank and Woori Bank about their overheated competition to attract more customers to their membership clubs, Thursday.
The nation's leading banking groups are giving membership points to new customers, aiming to inspire loyalty in customers amid low interest rates.
To increase their membership clubs, some of the banks are even reaching out to high school students.
As the competition between banks intensifies, the FSS called the vice presidents of the nation's four largest financial groups on Tuesday, asking them not to mobilize their employees to recruit for their membership clubs.
The regulator expressed concerns that cutthroat competition may lead bank employees to spend too much time recruiting more customers while neglecting their duties of customer protection.
"We've received complaints that bank employees are ordered to make 100 customers sign up for their membership clubs," said a spokeswoman at the FSS. "So, we cautioned financial groups not to pressure employees and be careful of the side effects of this activity."
Banking groups have launched such services to bolster loyalty in customers who are disappointed with extremely low interest rates.
Lenders are offering less than 2 percent interest on deposits, as the Bank of Korea lowered its benchmark interest rate to a record low of 1.25 percent in June.
Consumers can buy airline tickets or pay their smartphone bills with membership points collected from the financial groups, provided based on their transactions. Customers can even withdraw cash at ATMs with their points.
Hana Financial Group is leading the trend, having drawn 5.6 million customers to its membership club, called Hana Members, since its launch last October. Members can use their points at more than 100 stores, including S-Oil gas stations and CU convenience stores.
Shinhan Financial Group is gearing up to follow Hana, bringing 550,000 members to its FAN Club membership. Woori Bank also joined the competition by introducing WiBee Members earlier this month.
KB Financial Group plans to launch a similar membership program later this year.
As summer vacation time comes, banking groups are also offering better foreign exchange rates as well as providing tourist insurance free to customers going overseas with the condition of joining their membership clubs.
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