Rules block foreigners’ access to internet banks

11-Jun-2019 Intellasia | | 9:22 AM Print This Post

A growing number of foreigners living here are raising their voices against outdated financial regulations that prevent them from using the internet-only Kakao Bank and K bank.

Expats here said that they are very interested in using services of the internet banks, especially for remittances, because the services are cheaper and more convenient. Yet foreign residents do not have access to the services due to outdated identification systems in the banking industry.

Currently, financial service companies, including the internet banks, use a decades-old system that requires potential customers to prove their identities with their Korean registration cards or driver’s licenses indicating their nationality.

Because foreigners do not have these Korean IDs, they are unable to use internet bank services. Passports or alien registration cards cannot be used.

Expats find being unable to use internet bank services discriminatory.

“I have lived here for 11 years, so I pay taxes and fulfill the duties of a normal resident,” a foreign professional based in Seoul said asking not to be named.

“Therefore we should be able to have equal access to such services, and not allowing this can be seen as a form of discrimination,” he said.

Posts about being unable to use internet bank services can also be seen on online communities for expats.

According to data from the Ministry of Justice, 2,367,607 foreigners were residing here as of the end of 2018, an increase of 8.6 percent from the previous year.

Kakao Bank had over 9 million users in April, but had zero foreign customers.

Foreigners can visit other banks ― which have offline branches ― with necessary documents to open accounts and be issued debit and credit cards. This is not possible for internet banks because they do not have offline branches and can only identify customers through the existing system.

“There is definitely a demand from foreigners here, as their numbers grow, especially for remittance services,” a Kakao Bank official said.

“We have spoken with financial authorities about the matter, but the process to enable this is proceeding very slowly,” he said.

Another bank official said “The issue started being discussed when internet banks were launched.”

The two existing internet banks opened for business in April and July, 2017, respectively. This means two years have passed, but little has been done to fix the problem.

It appears banks with offline branches are not so eager to get the system fixed, because foreigners can visit them when they need to.

The financial regulator is well aware of this issue but seems to have no plan to take any tangible action in the near future.

“We are discussing the matter with the justice ministry but cannot reveal any details about a timeline or a detailed action plan,” a Financial Services Commission official said.


Category: Korea

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