Banks to Establish Agency Branches... Financial Services Commission to Promote Introduction of Bank Agency Services

[Asia Economy Reporter Song Hwajeong] The government is pushing for the introduction of bank agency services. As a result, currency exchange will become possible at travel agencies and airlines, and small loans will be available at retail businesses such as department stores.

According to the "Measures to Enhance Offline Financial Accessibility in the Banking Sector" announced by the Financial Services Commission on the 16th, bank agency services will be introduced, allowing third parties outside banks to perform simple and standardized banking tasks.

With the introduction of bank agency services, non-bank deposit-taking institutions such as post offices will be able to open standardized savings and deposit accounts as well as checking accounts. Savings banks and insurance companies will be able to mediate loan products and provide guidance on non-face-to-face loan products. Travel agencies and airlines will be able to handle small foreign exchange sales applications and the collection and delivery of sales proceeds.

In Japan, the bank agency system was introduced in 2002 to expand low-cost offline channels in areas with business gaps due to a decrease in branch numbers. Japan Post Bank utilizes about 3,000 post offices as agencies, and Daiwa Securities Group has its securities branches perform agency services for its internet-only bank subsidiary.

The Financial Services Commission plans to operate the bank agency service under a licensing system similar to that of banks, as it involves acting as an agent or intermediary for essential banking tasks. The scope of work and types of services will be limited through individual reviews at the time of licensing, depending on the agency's expertise. Additionally, to prevent financial consumer harm or service quality degradation, minimum personnel and capital requirements necessary for banking operations will be stipulated. Banks will have management and supervision responsibilities over agencies and be liable for customer damages, while agencies will be obligated to ensure soundness and consumer protection.

A Financial Services Commission official stated, "Although the concept of bank branches as agents exists under the Banking Act, they do not actually exist. With the introduction of bank agency services, actual agencies will be established," adding, "We will concretize the plan through a task force (TF) for amendments to the Financial Business Act by gathering opinions from the industry and academia, and prepare amendments to the Banking Act within this year."

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