Expansion of In-Person Services for Internet-Only Banks... Exceptions Allowed for Debt Adjustment Counseling and Document Verification

Financial Services Commission Approves Plan to Rationalize Scope of Face-to-Face Services

The financial authorities will partially expand the scope of face-to-face services permitted for internet-only banks. As a result, internet banks such as KakaoBank, K Bank, and Toss Bank will exceptionally be allowed to conduct in-person operations, but only for services that are difficult to handle through non-face-to-face channels.

On July 1, the Financial Services Commission announced that it had approved the “Plan for Reasonable Adjustment of Face-to-Face Service Scope for Internet-Only Banks” at its regular meeting.

Under the current Internet-Only Bank Act, internet banks are principally required to operate via non-face-to-face methods. In-person services are permitted only when unavoidable due to legal or technological limitations, or for consumer convenience.

The Financial Services Commission explained that, in response to changes in the financial environment such as the introduction of the Youth Future Savings program, expansion of debt adjustment support, and promotion of joint lending, as well as the need to broaden inclusive finance, it has exceptionally allowed face-to-face services when necessary.

With this measure, if an internet bank intends to provide face-to-face services beyond the scope previously permitted by law, it must submit a prior report to the Financial Services Commission at least seven days before commencing such operations, detailing the service content, operational method, and scope.

The face-to-face services allowed through prior reporting are as follows: (1) counseling for debt adjustment related to the management and collection of overdue claims, (2) verification of original documents for non-face-to-face submissions such as special mid-term termination of the Youth Future Savings program, (3) confirmation of the purpose of fund use and collateral value after loan disbursement, (4) handling consumer complaints and responding to financial fraud, (5) establishment, modification, or execution of security interests that are difficult to process electronically, (6) investigation of rights relationships regarding the subject property, and (7) verification of discrepancies between the registered business type and actual transaction details—for a total of seven categories.

The Financial Services Commission will also seek to amend the “Regulations on Supervision of Banking Business” in line with this measure.

However, the Financial Services Commission noted that these changes are supplementary measures intended to address uncertainties arising in the operation of internet banks, and stated that it will continue to monitor whether the permitted scope of face-to-face services is being adhered to.

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