Flexible Branches to Expand as Bank Hours Shorten; Moneylender Credit Loans to Active-Duty Soldiers Restricted

FSS holds Financial Consumer Protection Advisory Committee meeting
Expands refunds for prepaid balances and strengthens post-loan management of Sunshine Loans

With consumers expected to face inconvenience as bank hours are shortened starting in April 2027, financial authorities will consult with the banking sector to expand the operating days, business hours and services offered at flexible-hours branches. They also plan to restrict lending companies from providing general-purpose personal loans to active-duty service members to prevent excessive debt.

Financial Supervisory Service Governor Lee Chanjin delivers opening remarks at a meeting with asset management company CEOs at the Korea Financial Investment Association in Yeouido, Seoul, on the 13th. 2026.07.13 Photo by Yoon Dongju

The Financial Supervisory Service said on November 15 that it had discussed these measures at the fifth meeting of the Financial Consumer Protection Advisory Committee, held on November 12 and chaired by FSS Governor Lee Chanjin. Launched in March 2026, the committee is the top advisory body on consumer protection directly under the FSS governor. It reviews financial supervision and inspection issues, as well as proposed institutional improvements, from the consumer’s perspective.

The meeting covered seven agenda items, including improvements to flexible-hours bank branches, preventing excessive debt among active-duty service members, protecting users of prepaid funds, improving insurance policy terms and product descriptions, and strengthening internal controls on securities firms’ digital platforms.

First, the FSS will pursue improvements to flexible-hours branches to prevent reduced access to financial services as bank branches close and business hours are shortened. The number of bank branches fell from 5,831 at the end of 2022 to 5,466 at the end of September 2026. Starting in April 2027, banks are also expected to delay their opening time from 9 a.m. to 9:30 a.m.

As of the end of September 2026, 991 flexible-hours branches were operating nationwide. Of these, 44.5% were located in government offices and 38.5% were high-function, unmanned automated kiosks, while just 10.9% were near shopping areas or offices, where ordinary consumers can readily access them. Only 10.6% of staffed branches operated on weekends, and few offered general services beyond foreign exchange and deposits and withdrawals. In addition, 40.3% of staffed flexible-hours branches were concentrated in the Seoul metropolitan area.

The FSS plans to consult with the Financial Services Commission and the banking sector to expand the operating days, business hours and services offered at flexible-hours branches. It will also refer to practices overseas, including weekend operations and flexible schedules tailored to the day of the week or the type of service.

The authorities will also draw up measures to prevent excessive debt as more active-duty service members turn to high-interest loans from lending companies. The total amount of loans to active-duty service members provided by the top 30 lending companies registered with the Financial Services Commission surged from KRW 350 million at the end of 2022 to KRW 24.2 billion at the end of 2025. Reckless use of funds for high-risk activities, such as online gambling and virtual asset investments, is cited as one of the main causes.

The FSS plans to establish standard operating procedures for the lending industry by the end of 2026, restricting lending companies from providing general-purpose personal loans to active-duty service members, as is the case in other financial sectors. However, the current standards for secured loans and emergency loans will remain in place, taking into account urgent financial needs such as family living expenses and medical costs. The FSS will also step up financial counseling and education for active-duty service members.

Consumer protection will also be expanded for prepaid funds that have gone unused for an extended period. The FSS plans to extend to other prepaid service providers, including shopping and e-commerce companies and delivery platforms, the user notifications and refund measures currently being implemented by the three big tech companies Naver, Kakao and Toss Pay for prepaid funds that have remained unused for at least one year since they were charged or used. The notification interval will be shortened from once a year to once every three months. The FSS also plans to publish on its website the long-term unused prepaid balances held by each company.

In addition, post-loan management of Sunshine Loans in the non-bank financial sector will be strengthened. As of the end of June 2026, claims in the non-bank sector for which subrogation payments could be claimed from the Korea Inclusive Finance Agency but had not been claimed totaled KRW 22.3 billion, across 7,529 cases. Delays in subrogation payments could leave borrowers ineligible for debt adjustment or expose them to additional late-payment interest on top of the interest stipulated in their agreements. The FSS will regularly review overdue Sunshine Loans and unclaimed subrogation payments through industry associations, and notify borrowers in arrears about debt adjustment programs through AlimTalk and other channels.

Other matters discussed included ways to improve insurance product descriptions and policy terms, inspections of securities firms’ digital platform operations and possible responses, and allowing in-kind transfers of retirement pension assets held in accounts invested in funds whose redemptions have been suspended.

Governor Lee said, "It is crucial that we continue to identify and discuss issues that consumers can feel in their daily lives," and urged the authorities to "move quickly to ensure that the issues discussed lead to changes that people can truly experience."

The FSS will incorporate the committee’s advice into its financial supervision and inspection work and institutional improvement efforts. It also plans to publish key advice and review findings on its website at a later date.

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