KB Bank broadens remittance network for foreign customers
The service -- KB Quick Send -- uses Visa's global network to offer a convenient and cost-effective way for foreign nationals in South Korea to send money abroad. With a flat fee of 5,000 won ($3.66) and no intermediary or cable charges, KB Quick Send provides an affordable alternative to traditional remittance services. Most transfers are completed within one business day.
Accessible through the KB Star Banking mobile app, the platform offers a streamlined and user-friendly experience.
To celebrate the expansion, KB Kookmin Bank is offering a 10,000 won financial coupon to foreign customers who use the service. Additionally, the first 100 customers to transfer 500,000 won or more will receive a 30,000 won GS25 mobile gift certificate. The promotion runs through the end of July, with full details available on the app.
'KB Quick Send is part of our effort to enhance financial accessibility for foreign customers,' a bank spokesperson said. 'We will continue to expand tailored services to meet the needs of a growing and diverse customer base.'
With more than 2.65 million foreign residents now living in South Korea, local banks are increasingly rolling out multilingual services and exclusive financial products to serve this expanding market. As of April, the six major banks in Korea reported a combined total of 7.7 million foreign customer accounts.
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![[Editorial] Banking beyond margins](/_next/image?url=https%3A%2F%2Fall-logos-bucket.s3.amazonaws.com%2Fkoreaherald.com.png&w=48&q=75){kind=small}
Korea Herald
30-07-2025
- Korea Herald
[Editorial] Banking beyond margins
Korean banks reap outsized profits based on a risk-averse model that sidelines vital sectors South Korea's four largest financial groups — KB, Shinhan, Hana and Woori — posted a combined net profit of 10.33 trillion won ($7.42 billion) in the first half of 2025, setting a new record. What makes this figure striking is not only its magnitude but the underlying composition of these earnings. Despite four benchmark rate cuts by the Bank of Korea since late 2024, commercial banks promptly lowered deposit rates but were reluctant to reduce lending rates. As a result, the net interest margin — the difference between what banks pay depositors and what they charge borrowers — expanded sharply. Interest income now constitutes more than 75 percent of total bank revenue. Simply put, banks have reaped outsized profits largely by maintaining elevated lending rates and amid falling funding costs. Typically, lower base rates compress banks' margins as competition forces lenders to cut loan rates more quickly than deposit rates. South Korean banks, however, have defied this norm. The average spread between lending and deposit rates, roughly 0.5 percentage points in 2023, surged to over 1.3 points in the first five months of 2025. This extraordinary divergence reflects a blend of regulatory deference and muted competition, enabling banks to harvest windfall gains with little risk. Government policy has been complicit in this dynamic. Measures aimed at curbing household debt and cooling the overheated housing market have given banks both political cover and regulatory justification to keep lending rates high. Meanwhile, state-backed mortgage products, which now guarantee up to 90 percent of the principal, dominate new housing loans, sharply reducing the default risk for lenders and ensuring stable, low-volatility returns. The confluence of regulatory tightening and public guarantees has institutionalized a risk-averse lending model. Banks extend credit with minimal exposure and remain comfortably within regulatory bounds. Yet this model departs from the traditional role of banks as catalysts for economic growth. It encourages caution and disincentivizes the proactive capital deployment essential for innovation and structural transformation. Meanwhile, the real economy exhibits signs of strain. Growth remains sluggish, corporate investment cautious, and critical sectors like artificial intelligence, green energy and biopharmaceuticals remain undercapitalized. Lending to small and medium-sized enterprises increased by less than 1 percent in the first half of the year, while mortgage lending surged over 4 percent. This pattern signals capital flowing disproportionately into asset accumulation rather than productive enterprise — a troubling trend for South Korea's long-term productivity and competitiveness. Banks are more than mere custodians of savings. Their fundamental role in the economy is to identify viable opportunities, absorb risks and allocate capital to sectors capable of sustaining growth. South Korea's demographic headwinds and technological imperatives demand precisely this catalytic role. A banking system preoccupied with low-risk, short-term spreads is ill-suited to these challenges. President Lee Jae Myung has urged banks to move beyond reliance on interest income and play a more active role in supporting the real economy. The Financial Services Commission is reportedly developing guidelines to encourage longer-term investment in venture capital, listed equities and strategic sectors. These signals are welcome but belated. And mere exhortation will not suffice. What is required is a robust policy framework that rewards measured risk-taking. Instruments such as risk-sharing schemes, differentiated capital requirements and targeted incentives for innovation lending should be prioritized. Without such tools, banks will likely default to the safety and predictability of margin-driven profits. The stakes go beyond financial-sector efficiency. If banks continue to pocket record earnings while the innovation economy struggles for capital, South Korea could fall behind in the global contest for economic resilience. Banks can no longer afford to be passive observers of macroeconomic forces; their core mission must be to underpin and accelerate sustainable economic progress.
Korea Herald
28-07-2025
- Korea Herald
Insurers target Korea's 1m foreign workers with improved access
With coverage still at about 50%, foreign workers drive new insurance push As South Korea's foreign workforce surpasses 1 million, insurers are lining up products tailored to this growing but historically underserved population. With local insurance markets nearing saturation, foreign residents have become increasingly attractive as a new source of growth — launching tailored products, forming partnerships and expanding digital services. Workers make up half of Korea's 2.04 million long-term foreign residents, and financial institutions are expanding insurance offerings and streamlining access through digital platforms. A recent agreement between KB Kookmin Bank, Korea's largest commercial bank, and Samsung Fire & Marine Insurance, the nation's biggest non-life insurer, targets blue collar workers. The partnership aims to simplify access to the four types of mandatory insurance required under the government's Employment Permit System for workers on E-9 (non-professional employment) and H-2 (work-and-visit) visas. The four types are: Departure Guarantee Insurance, which serves as a severance substitute for those who complete over one year of work and return home; Wage payment guarantee insurance, covering unpaid wages in case of employer default; Return-expense insurance, which helps cover flight costs, with premiums paid by the worker and reimbursed upon verified departure; and Accident insurance, which compensates for non-work-related injuries, illness or death, supplementing Korea's industrial accident coverage. Of the four, the first two must be arranged by the employer, while the latter two are the employee's responsibility. Return-expense insurance is the only one for which the worker pays the premium directly. Although Departure Guarantee Insurance is similar to statutory severance pay, it is only payable when workers leave Korea, making it difficult to resolve disputes if the amount is less than what is owed. Recent moves such as this make it easier to monitor what has been paid in, allowing workers to check the amount in advance and take action if necessary. Starting this month, foreign workers will be able to view their Samsung Fire-provided insurance policies via KB Kookmin Bank. By the third quarter, the service will expand to include online claim filing, enabling a fully digital policy management for foreigners. This marks Samsung Fire's second partnership with a domestic bank for E-9 visa holders, following its collaboration with Hana Bank last September. Meanwhile, Woori Bank has also expanded access, allowing foreign laborers to view work-related insurance policies via its 'Woori Won Global' app. NongHyup targets seasonal workers NH NongHyup Bank — one of Korea's five largest commercial banks, with a focus on rural and agricultural finance — has also entered the space with a financial package tailored to seasonal workers on E-8 visas. Launched in June, the 'E-8 Package' is the first product under the bank's new foreign customer brand 'NH Global With.' It offers integrated services including insurance coverage in partnership with group affiliate NH Property & Casualty Insurance. The package was developed based on feedback from seasonal workers themselves, aiming to close service gaps for those who still fall through the cracks of Korea's insurance system. In a related move, NH Casualty also rolled out a specialized policy for public seasonal workers — those hired directly by municipal governments and dispatched to farms via NongHyup cooperatives. Their number, which includes non-E-8 holders reached 95,700 this year, up 40 percent on-year. The policy covers farm-related liability, early repatriation due to illness or injury, and losses from government-declared disaster zones. Foreign policyholders on the rise This wave of activity comes as the number of insured foreign residents in Korea continues to grow. As of last year, 1.03 million of them were enrolled in a plan with a local private insurance firm. That's just over half, and up from 990,000 the year before. Despite this growth, the coverage rate among foreign residents still lags far behind that of Korean nationals, which nears 90 percent. Reflecting this gap and its potential, insurance contracts held by foreign nationals in Korea grew at an average annual rate of 19 percent between 2019 and 2023, significantly outpacing the 13.2 percent growth recorded among Korean policyholders, according to the Korea Credit Information Services. To support these developments, the Financial Supervisory Service established a dedicated task force in May and launched a comprehensive review of insurance subscription trends among foreign residents. The regulatory agency requested insurers to submit data on the number of foreign policyholders and contracts from 2021 to 2024, along with measures taken to improve accessibility. The FSS also plans to roll out standardized guides in English and Chinese for each stage of the insurance process — including enrollment, maintenance and claims — in the coming month. Starting in the fourth quarter, insurers will be required to provide these multilingual guides alongside existing materials at key touchpoints.
Korea Herald
22-07-2025
- Korea Herald
Checks, gaps, global voices: The evolving face of Korea's bank governance
Governance reforms gain ground amid uneven progress on diversity, independence South Korea's financial giants have been working to shed their long-standing reputation for rubber-stamp governance, as diversity and boardroom expertise have visibly improved. Yet, with CEOs and legacy ties still exerting implicit power in some high-level conference rooms, the extent to which boards can hold management accountable remains in question. All four of Korea's top financial groups now have at least two female outside directors, with women holding an average of 32 percent of those seats. Shinhan leads with four of nine, followed by KB with three of seven, Hana with three of nine and Woori with two of seven. Notably, the female directors are, on average, more than a decade younger than their male peers — suggesting that gender inclusion is also fostering generational renewal. Average board ages cluster between 61 and 63, with Shinhan and Woori the youngest at roughly 61.7 years old. However, none of the boards currently includes a foreign national. The last was Stuart B. Solomon, a former MetLife executive who left KB in 2022. The absence is especially striking given that foreign investors now hold an average 63 percent stake across the four groups — more than six times the Kospi average. While not legally mandated, foreign directors are widely seen as a marker of governance transparency and stronger representation of foreign shareholders' interests. Strengthening internal oversight was the dominant theme in board appointments across Korea's top banking groups this year. Woori made the most sweeping changes, replacing four of its seven outside directors after a high-profile internal control failure led to regulatory scrutiny. It also launched an ethics and internal control committee and revamped its audit committee. New appointees include Kim Choon-soo, a compliance specialist and former head of Eugene Group's ethical management division, and Rhee Yeong-seop, a Seoul National University professor with expertise in economics and financial regulation — both expected to strengthen the group's internal controls. To support Woori's digital transformation, tech entrepreneur Kim Young-hoon, a founding member of Daou Tech, also joined the board. Still, gaps remain. Woori's board skill matrix highlights a lack of expertise in consumer protection and legal affairs — areas that need strengthening going forward. The other three groups, with more balanced skill coverage, emphasized continuity while selectively shoring up governance capabilities. Shinhan added two new directors with deep ties to Japan, preserving its long-standing alignment with the Korean-Japanese community and maintaining the share of third-generation Korean Japanese outside directors. New appointees include Chun Myo-sang, a third-generation Korean Japanese and certified public accountant in Japan, and Yang In-jip, a Korean national with extensive professional experience in Japan, including as a tech CEO and former chair of the Korean Business Association in Japan. This enduring alignment reflects Shinhan's founding roots — established with capital from Korean Japanese investors in the 1980s — and continues to serve as a stabilizing force in its governance. KB maintained board stability while adding targeted expertise. New appointees include Ewha University economics professor Chah Eun-young and E-Jung Accounting CEO Kim Sun-yeop, bolstering regulatory and audit oversight. A new internal controls committee is chaired by Lee Myong-hwal, a veteran economist and policy expert. Notably, KB limits outside director terms to five years, shorter than the industry's six-year norm, underscoring its commitment to board renewal. Hana made minimal changes, but focused on governance upgrades. It established an internal controls committee and added Suh Young-sook, former chief credit officer at SC Bank Korea, as its only new outside director. Though modest in scope, the move raised Hana's female director ratio and added global credit expertise. Despite formal efforts to separate management and oversight, executive influence remains entrenched. At KB and Shinhan, the CEOs of their flagship banks — Lee Hwan-ju and Jung Sang-hyuk, respectively — sit on the holding company's board as 'nonstanding' directors: nonexecutive, nonindependent, but voting members who serve on committees. These positions blur the boundary between oversight and management. Hana goes further, including not only its CEO, but also two vice chairs — Lee Seung-lyul and Kang Seong-muk — on the board. In 2024, the group expanded its board to 12 members — the largest among its peers — by adding external directors to balance the increased number of internal seats. Notably, Lee remains a board member even after stepping down as Hana Bank CEO, reinforcing the view that these seats function as power bases for the group's CEO Ham Young-joo, who secured a three-year term extension in March. As foreign ownership rises, investor communication is increasingly seen as a measure of governance openness. All four groups now provide English-language disclosures, translated shareholder materials and access to electronic voting — but depth and quality still vary. Shinhan and Woori lead in outreach. From July 2024 to June this year, Shinhan held eight investor sessions involving board members, along with 24 CEO- and 43 chief financial officer-level meetings. It offers disclosures in Korean, English and Japanese and commissions third-party board evaluations. Woori conducted over 100 foreign investor meetings during the year, many attended by the CEO, signaling volume and senior-level commitment. Hana and KB focus on accessibility. Hana has held two annual investor roundtables since 2022, with full participation from outside directors. This year, it scheduled one at 10 p.m. local time to accommodate North American shareholders. KB upgraded infrastructure this year with simultaneous interpretation and livestreaming of shareholders meetings, while tailoring voting procedures for institutional and American Depositary Receipt holders. Woori, Shinhan and KB — each listed on the New York Stock Exchange — also file English-language disclosures via the US Securities and Exchange Commission, alongside Korean regulatory filings. Still, global investors see room for improvement. More frequent board engagement and clearer channels for shareholder input remain key. Amar Gill, secretary-general of the Asian Corporate Governance Association, stressed that board-level dialogue is essential not just for transparency, but to strengthen the boards themselves. 'There should at least be a designated point person on the board for foreign investors to engage with,' Gill told The Korea Herald. 'The most important part is engagement with investors at the board level, particularly from independent directors. They should be getting feedback from the market. That is how they are empowered.' He also stressed that logistical improvements around annual shareholders meetings are needed to support non-Korean shareholders. 'Two to three weeks' notice is not enough. It should be at least a month in advance. And foreign investors attending should be able to ask questions.'
