'100% Non-Face-to-Face Mortgage Loans' Approaching... Banks Engage in Differentiated Competition

Commercial Banks and Internet Banks Gradually Preparing for 'Fully Non-Face-to-Face' Services

[Asia Economy Reporter Kiho Sung] As big tech companies (large information and communication companies) gradually expand their presence in the financial sector, non-face-to-face mortgage loans (jumdae) are also spreading. Especially with the COVID-19 situation highlighting non-face-to-face services, commercial banks are accelerating efforts to target the non-face-to-face jumdae market.

According to the financial sector on the 26th, Woori Bank plans to launch a 100% non-face-to-face jumdae as early as this month. KakaoBank also plans to release a 100% non-face-to-face jumdae product by the end of this year at the latest. With this, all five major commercial banks and internet-only banks will handle non-face-to-face jumdae.

The non-face-to-face jumdae began last year when KB Kookmin Bank introduced the ‘KB Star Mortgage Loan,’ which allows customers to check loan eligibility and amounts in advance through internet banking. Then, K Bank launched a non-face-to-face jumdae product in August of the same year, marking the start of serious competition. Regional banks are also joining in launching non-face-to-face jumdae products. Busan Bank and Daegu Bank recently launched the ‘ONE Apartment Loan’ and ‘DGB No-Visit Mortgage Loan (Living Stability Fund),’ respectively. Regional banks feel a sense of crisis as commercial and internet banks expand their territories with non-face-to-face jumdae products while their own sales power remains relatively weak.

However, the market views the jumdae products released so far as falling short of being ‘completely non-face-to-face.’ Although commercial banks offer both new and refinancing loans through non-face-to-face jumdae, administrative procedures such as consent forms for accessing administrative information and mortgage registration processes are not conducted non-face-to-face, requiring at least one visit to a branch. K Bank operates a simplified non-face-to-face apartment mortgage loan requiring only two documents?registration certificates (land, building) and income verification documents?but it only handles refinancing loans, not new loans.

On the other hand, Woori Bank and KakaoBank are preparing 100% non-face-to-face jumdae products. All properties with verifiable market prices, including apartments, row houses, and multi-family houses, will be eligible, and both new and refinancing loans will be available. K Bank is also reportedly conducting internal reviews to expand its non-face-to-face jumdae products beyond the current apartment refinancing loans.

The reason banks focus on non-face-to-face jumdae is that jumdae loans have larger loan amounts and higher repayment rates compared to other loans. Additionally, the activation of non-face-to-face services is expected to attract a large demand for housing funds from the mobile-savvy 2030 generation. This is why the financial industry anticipates fierce competition to realize ‘more convenient non-face-to-face jumdae.’

A banking industry official explained, "As COVID-19 spreads, more customers find visiting banks inconvenient," adding, "Demand for non-face-to-face jumdae services is growing, so banks are focusing on creating convenient services."

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