A Dedicated Team for 'Hidden Financial Asset Management' to Be Established at Banks

[Asia Economy Reporter Song Hwajeong] Management will be strengthened to prevent hidden financial assets. Accordingly, each bank must establish a dedicated organization for managing hidden financial assets within the bank as early as the first quarter of next year.

On the 13th, according to the financial sector, the Korea Federation of Banks announced a revision of the Financial Consumer Protection Model Code and began collecting opinions. The main content of this revision is the strengthening of hidden financial asset management.

Hidden financial assets generally include long-term inactive financial assets with no transactions for more than three years, dormant financial assets whose statutory expiration period has been completed (excluding lost stocks and dormant securities), and unused card points.

In July, the financial authorities announced plans to promote the "Improvement of the Hidden Financial Asset Management System" to minimize the occurrence of hidden financial assets. Subsequently, through consultations with the banking sector and the Financial Supervisory Service, a revision reflecting the operation of management organizations responsible for preventing the occurrence of hidden financial assets was prepared.

First, banks must establish a management organization dedicated to hidden financial assets. This dedicated organization will be responsible for preventing and reducing the occurrence of dormant and long-term unclaimed financial assets.

Additionally, banks must establish regulations regarding the timing of guidance on the handling methods of financial assets at and after maturity of financial products, as well as information on disadvantages due to the passage of time.

Details on this will be separately determined by banks in their guidelines, etc.

The prepared revision will undergo a public consultation until the 21st and is scheduled to be approved by the Korea Federation of Banks' board of directors in January next year. If approved by the board, it is expected to be implemented within the first quarter.

According to the financial authorities, as of the end of December last year, the total hidden financial assets in the financial sector amounted to approximately 16 trillion KRW, with about 200 million accounts. This includes 12 trillion KRW in long-term inactive financial assets, 1.4 trillion KRW in dormant financial assets, and 2.5 trillion KRW in unused card points. Through a six-week joint campaign across the entire financial sector called "Finding Hidden Financial Assets," conducted from April 11 to May 20 this year, approximately 1.5 trillion KRW in hidden financial assets from 2.55 million accounts were returned to financial consumers. This amount accounts for about 40% of the total refunds (3.7 trillion KRW) made through campaigns and the regular refund system since June 2015. However, approximately 14.5 trillion KRW of hidden financial assets still remain. Considering that a significant amount of hidden financial assets still exist despite continuous campaigns, the financial authorities have decided to establish a management system to minimize the occurrence of hidden financial assets.

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