[Financial New Paradigm ESG] Paperless Becoming the Trend in Banking... The First Step Toward Eco-Friendly Finance

Points for Mobile Account Conversion
100 Million Won Donated from Paper Savings
Acceleration Driven by Untact Trend

"If you convert your paper passbook to a mobile passbook, you will receive 3,000 My Shinhan Points," Shinhan Bank recently conducted a campaign with this message through all its branches nationwide. The campaign, named 'Paper Saving Earth Saving Movement with Shinhan Bank,' aims to drastically reduce the approximately 100 million paper documents produced annually in the financial sector.

It is said that about 2,800 mature 30-year-old trees are consumed each year to produce the thick rectangular paper passbooks that households still keep a few of. The cost to produce one paper passbook, including stamp tax and labor costs, can be as high as 7,000 KRW. A Shinhan Bank official stated, "We plan to continue this campaign, which customers and employees can practice together, to actively participate in environmental improvement."

Since the second half of last year, KB Kookmin Bank, which launched the 'KB Green Wave' campaign to reduce paper usage, has cut paper usage related to its operations by about 30% compared to the previous year. Based on these activities, KB Kookmin Bank achieved a tangible result by donating 100 million KRW saved to the nonprofit foundation Happy Bean. The donation is used for activities such as cleaning up marine debris after typhoons and providing clothing support to children from low-income families.

The banking sector's paperless policy is regarded as the first step and a core practical task of ESG (Environmental, Social, and Governance) management aimed at accelerating the transition to an eco-friendly, low-carbon economy, and it has become a prevailing trend. The paperless policy is expected to accelerate further, intertwined with the digital transformation centered on non-face-to-face interactions accelerated by the COVID-19 pandemic.

The government is encouraging such movements based on institutional improvements. A representative example is the Basic Act on Electronic Documents and Electronic Transactions, which came into effect on December 10 last year. It stipulates that electronic documents have the same legal effect as paper documents unless there are special legal restrictions.

Accordingly, business acts requiring written or documented forms under various laws can now be conducted with electronic documents. As of 2018, about 20,000 provisions in 3,000 laws required written or documented forms, which can now be replaced by electronic documents. The inconvenience of having to store both electronic and paper documents simultaneously has also been resolved.

Recently, banks have been collaborating with big tech companies to shift customer notification methods to digital formats. Woori Bank, starting December 14 last year, became the first commercial bank to implement the 'Digital Mail Delivery Based on Identity Verification (Mobile Electronic Notification) Service' by cooperating with KakaoPay and KT, improving the paper mail delivery method.

This service provides digital notifications through KakaoTalk messages and SMS after smartphone identity verification. It contributes to environmental protection by reducing paper used for postal notifications while also reducing customer inconvenience from missed notifications and the risk of personal information leakage due to lost mail.

The foundation for digital-centered financial transactions is considered to be somewhat established domestically. According to the Bank of Korea, by the end of 2019, the number of mobile banking registered customers in domestic banks was 120.95 million (including duplicates), a 15.5% increase from the previous year. Meanwhile, the issuance of paper passbooks by the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?has decreased to fewer than 30 million.

The financial authorities announced a plan in 2015 to reduce paper passbooks and intended to impose fees on paper passbook issuance starting September 2020, but this has not yet been implemented. The policy remains at the 'incentive for not issuing paper passbooks' stage, just before the 'charging for paper passbooks' stage.

Japan’s major bank, Mizuho Bank, will implement a policy from the new year to charge a fee of 1,100 yen for issuing paper passbooks to new customers under 70 years old. A representative from a domestic commercial bank said, "In Japan, inducement through incentives and cost imposition measures are being implemented simultaneously. It seems that such movements will begin soon in Korea as well."

This content was produced with the assistance of AI translation services.