Banks Considering 'In-House Platform' for Large Debt Refinancing... Attention on In-Bank Moves

Collecting Bank Opinions... Will Soon Be Delivered to Authorities
Interest in Which Choices Inbans Will Make in the Future

[Asia Economy Reporter Kiho Sung] Banks, which have shown resistance to refinancing loan services using fintech platforms, are now seeking new platforms. If they succeed in distancing themselves from fintech, concerns such as fees and dependency issues in the banking sector can be resolved at once. However, if fintech platforms are not used, customer accessibility decreases, and since it is unclear what stance internet-only banks closely linked to fintech will take, the financial sector's attention is focused on this issue.

According to the financial sector on the 23rd, the Korea Federation of Banks has recently been collecting opinions from banks for platform diversification. Once the opinions are gathered, the Federation plans to deliver the related content to the Financial Services Commission.

The refinancing loan platform is a service where financial consumers can compare loan interest rates from various financial institutions such as banks and insurance companies at a glance on mobile applications (apps) and switch to places with lower interest rates. It is one of the key projects created by financial authorities with the aim of making it easy to refinance "all household loans" to reduce the interest burden on ordinary citizens.

The banking sector has strongly expressed dissatisfaction regarding the introduction of refinancing loan platforms. While they fully agree with the financial authorities' purpose of introduction, there is concern that if the related platform is operated mainly by fintech companies, dependency could occur.

Subsequently, the banking sector began discussions related to their own platforms, but in meetings with financial authorities, they showed a reserved stance that "if a platform that is not one-sided is created, they might not create their own platform." However, when the financial authorities recently announced an official position that "platform construction is a matter for the banking sector to decide, and the government will respect the decision," they began collecting opinions on platform diversification.

The financial sector broadly sees two types of platforms that banks can create. One is a platform created independently by the banks, and the other is using a platform created by the Korea Financial Telecommunications and Clearings Institute. Both can completely solve issues such as fees and dependency. The downside is that customer accessibility is lower compared to fintech platforms that already have many users, which could lead to losing in competition. Also, to launch the aforementioned platforms, opinions from commercial banks, regional banks, and internet-only banks must all be coordinated. Since each party's stance on refinancing loans is different, if some members withdraw, the competitiveness of the platform itself will naturally decline.

It is also crucial what stance internet-only banks affiliated with the Korea Federation of Banks will take. Especially since internet-only banks are close to fintech platforms, if they launch refinancing loan services to target the loan market, they can achieve greater effects. The fact that internet-only banks have recently been increasing their financial power through initial public offerings (IPOs) and capital increases is also a variable. In a situation where government loan regulations are further tightened, if they have sufficient financial power, refinancing loans can attract more customers than new loans.

A financial sector official explained, "Since internet-only banks are also members of the Korea Federation of Banks, they can voice their opinions in discussions related to refinancing loan platforms," adding, "Since even commercial banks have slightly different positions, to promote their own platform, their opinions must first be unified."

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