Introduction of Bank Agency Business Agreed by Ruling and Opposition Parties... Will 'Financial Deserts' Disappear?

[Financial News] The ruling and opposition parties are expected to formalize the introduction of bank agency business to replace some functions when bank branches close. This comes as non-face-to-face transactions increase and banks are reducing branches, leading to complaints from the digitally marginalized who prefer face-to-face transactions. While emphasizing that it is a livelihood bill aimed at eliminating 'financial deserts', both parties believe that the interests align with the votes of the Yeong-Honam regions, where the elderly population is relatively high, raising expectations for a consensus on the bill.  
According to political circles on the 22nd, Lee Jeong-moon, the senior deputy chairman of the Democratic Party's Policy Committee, proposed a partial amendment to the Banking Act on the 17th, which includes regulations on bank agency business.
Bank agency business is a system that allows third parties, not banks, to handle transactions such as deposits, savings, loans, and remittances, which are the inherent duties of banks. In the case of domestic bank agency business, the scope is limited to customer consultation, transaction application, and contract conclusion, excluding product subscription approval and review tasks, to handle simple tasks of on-site customers and meet the demand for face-to-face transactions. 
In a phone call with Financial News, Senior Deputy Chairman Lee explained the background of the bill's proposal, saying, "In local areas, stores where face-to-face business can be conducted are disappearing." He added, "The Democratic Party believes this law is essential for the people and will push for its rapid legislation." Regarding the possibility of cooperation from the opposition party, he said, "Since it is not a specific political issue, we will try to quickly bring it to review and pass it through mutual consultation," leaving the possibility of cooperation open. 
In fact, in February, Choi Eun-seok, a member of the People Power Party, also proposed a similar bill. Choi also expressed the same awareness of the problem, saying, "The financial accessibility of the digitally vulnerable is shrinking, and there is a business gap in banking services in rural areas." 
However, during the review process of the bill, opinions were raised that it is necessary to strengthen the responsibility of banks for supervision before the full introduction of bank agency business, establish clear regulatory standards, and build a system to prevent consumer damage.
In response, Senior Deputy Chairman Lee proceeded with a supplementary legislation that includes such opinions. The bill proposed by Senior Deputy Chairman Lee includes △definition of bank agency business △regulations on approval and cancellation requirements for bank agency business △disclosure of management and prohibition of unsound business practices for bank agency business △sanctions on bank agents △liability for damages to users of bank agency business. More specific regulatory standards and supervision plans were prepared together.
Both parties claim that the bill is for the digitally marginalized, represented by the elderly, but it seems there are other intentions as well. In particular, there is an interpretation that the legislation targets the votes of the elderly in the Yeong-Honam regions, each party's support base, ahead of the upcoming 6.3 local elections next year.    
Meanwhile, according to the Financial Services Commission, 70% of the elderly used only face-to-face banking transactions in 2022, but the number of bank branches sharply decreased from 6,454 in 2020 to 5,690 in 2024. In response, the Financial Services Commission has been piloting bank agency business since March this year to meet the demand for face-to-face banking services from the digitally marginalized. 



gowell@fnnews.com Kim Hyung-gu Reporter