By Kim Bo-eun
Questions are arising as to how banks' introduction of "open banking" will affect their customers. The government will have banks run a trial of the new system from October and officially implement it from December.
Under the system, customers with accounts at multiple banks will be able to check them through just one bank's mobile banking application, as well as what types of financial products they have signed up for.
They will also be able to compare various loans and their interest rates to get the best option.
This is designed to heighten competition among financial firms to attract more customers.
For banks, the new system is set to pose new challenges, as before its introduction they could rely on customer loyalty.
However, under the new system customers will be able to select which banking app they will use based on their experience, which means they could abandon the application of one bank to use more convenient services offered by another.
Fintech players such as Toss and Banksalad already offer such services.
Banks are rushing to introduce their applications ahead of October, in an attempt to secure customers.
KEB Hana Bank on Wednesday began offering a service through which its customers can check account balances and transactions at up to 19 banks.
Standard Chartered Bank Korea revamped its mobile applications in June to offer similar features, including one allowing customers to check loans and investment products they signed up for with different financial firms.
KB Financial added a new "loan platform" to its existing application, which will enable users to check interest rates of loans as well as their credit rating, to borrow what they need.
Banks are also granting fintech firms access to proprietary software under their open application program interface (API) and share customer data.
"As the open banking system will increase competition among financial firms, customers will be able to access services more conveniently," Suh Jeong-ho, a senior research fellow at the Korea Institute of Finance, said.
However, he noted the system also poses potential risks.
"While customer data is shared based on their consent, concerns may rise over data breaches or operational risks," he said. "Financial firms should make preparations to prevent such risks from arising."
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Under the system, customers with accounts at multiple banks will be able to check them through just one bank's mobile banking application, as well as what types of financial products they have signed up for.
They will also be able to compare various loans and their interest rates to get the best option.
This is designed to heighten competition among financial firms to attract more customers.
For banks, the new system is set to pose new challenges, as before its introduction they could rely on customer loyalty.
However, under the new system customers will be able to select which banking app they will use based on their experience, which means they could abandon the application of one bank to use more convenient services offered by another.
Fintech players such as Toss and Banksalad already offer such services.
Banks are rushing to introduce their applications ahead of October, in an attempt to secure customers.
KEB Hana Bank on Wednesday began offering a service through which its customers can check account balances and transactions at up to 19 banks.
Standard Chartered Bank Korea revamped its mobile applications in June to offer similar features, including one allowing customers to check loans and investment products they signed up for with different financial firms.
KB Financial added a new "loan platform" to its existing application, which will enable users to check interest rates of loans as well as their credit rating, to borrow what they need.
Banks are also granting fintech firms access to proprietary software under their open application program interface (API) and share customer data.
"As the open banking system will increase competition among financial firms, customers will be able to access services more conveniently," Suh Jeong-ho, a senior research fellow at the Korea Institute of Finance, said.
However, he noted the system also poses potential risks.
"While customer data is shared based on their consent, concerns may rise over data breaches or operational risks," he said. "Financial firms should make preparations to prevent such risks from arising."
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