Post offices in Korea will offer banking services of commercial banks

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South Korea’s 2,500 post offices nationwide are expected to serve as physical branches of the country’s four major commercial banks offering cash deposit and withdrawal services later this year amid rapid digitalization of the financial sector. which led to a sharp decline in offline banking. branches.

Korea Post and the four major Korean commercial banks – KB Kookmin Bank, Shinhan Bank, Hana Bank and Woori Bank – have signed a memorandum of understanding with the Korea Financial Telecommunications & Clearing Institute (KFTC) to expand the consignment partnership between banks. and post.

Under the agreement, post offices across the country will be able to offer simple banking services from the country’s four major commercial banks, such as cash deposits, withdrawals, account inquiries and ATM service in the fourth quarter at the earliest. Since the number of branches of the country’s four major commercial banks is 3,079 last year and there are 2,482 post offices across the country, the number of offline banking channels will be almost doubled.

Post offices currently offer simple banking services of four non-major and regional banks – Citibank, Industrial Bank of Korea, Korea Development Bank and Jeonbuk, have partnered with post offices.

“The government has decided to improve offline access to banking services to ensure consumer choice to access online and offline financial services and improve convenience for vulnerable groups such as the elderly,” said Kim So-young, vice chairman of the Financial Services Commission (FSC), said at the signing ceremony on Thursday.

Amid rapid digital transformation, banks have reduced the number of offline branches while increasing mobile-based financial transactions. At the end of last year, bank branches nationwide stood at 6,094, down 311 from the previous year. The number of branches per 100,000 Koreans was 14.4, lower than the United States (29.7) and Japan (33.9).

The FSC plans more services like loans and investments later after reviewing measures to avoid underselling.

Financial authorities will also examine the possibility for non-banking financial institutions and retail chains to provide simple and standardized banking services. With this change, travel agencies and airlines would be able to carry out small foreign exchange transactions. In addition, convenience store service for withdrawals and deposits of small amounts will be expanded.

By Kim Yoo Sin and Jenny Lee

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