Sara, a Czech citizen who has been living in Korea for about six years, tried to open an online bank account three years ago.
“But it didn’t work, as it wasn’t open to foreigners. I had a lot of trouble with verifying my identity for various services online,” she said.
The difficulty in accessing online services due to issues of identity verification has long been a frustration for foreigners residing in Korea, so the Korean government has recently come up with easier mobile banking.
“It is important to improve the local environment to attract foreign talent,” Justice Minister Han Dong-hoon said on Sept. 18 upon the launch of the new residence card verification service in collaboration with the Financial Services Commission and the Korea Financial Telecommunications and Clearings Institute. “I anticipate that the service will help alleviate inconveniences that foreigners experience regarding (online) financial transactions.”
Q: What is the residence card verification service?
Under the new scheme, registered foreigners with a residence card can conduct financial transactions with their mobile phones without having to visit a bank in person, just like Korean citizens.
For instance, if a registered foreigner needs to verify their identification when using a mobile app for banking services, they can submit their residence card information to the bank using their mobile phone. The lender then transmits this data to the Ministry of Justice.
The ministry will conduct a comparison of the card details and the photo with previously stored data.
The new service extracts facial features from the photo on a foreigner's registration card and compares them to photographs in a database at the Ministry of Justice to verify the authenticity of the foreign resident's information. After this process, the ministry confirms the card's authenticity to the bank or other financial institution in real time.
Q: Why does it matter?
Online services are convenient and are becoming more essential as many banks are closing some of their branches in a push toward digitization.
This trend may result in fewer banking services for foreign residents if they don't have adequate access to online services in an increasingly digital world.
According to the Korea Federation of Banks, as of June, Korea has a total of 24 bank branches accessible to foreign residents, where tellers speak English and other languages. This is a drop from 33 such branches in February last year and 38 in May 2021.
Lee Hyo-jung, a spokesperson for the Korea Support Center for Foreign Workers, said that banking is a crucial service that foreign workers in Korea rely on in their daily lives.
“Lots of foreign workers prefer sending money back home because the interest rates are much higher there,” she said. “I’ve seen some of them use Hana Bank’s Hana EZ app for foreigners, but I know many still find it difficult to use mobile banking services.”
Q: Which banks have implemented the service?
As of Sept. 27, only one out of the top five commercial banks in Korea, Hana Bank, has implemented the new residence card verification service.
Other banks are expected to follow suit in the coming months.
KB Kookmin Bank is currently testing the new verification service at some of its offline branches as a pilot and plans to apply it as early as October.
Shinhan Bank also has applied the service at offline branches and plans to apply the service to its mobile app, Shinhan Sol, as early as October.
Woori Bank is likely to be the last to apply the service for mobile as it plans to apply it during the first quarter of next year.
Q: What about internet-only banks?
Among three internet-only banks, Toss Bank is the only internet bank in Korea that has implemented the residence card verification service so far.
Kakao Bank is considering implementing the service, but has not yet given a timeline.
“We are also considering a variety of options to improve our service, including the residence card verification service,” a Kakao Bank official said.
He added that a review concerning the security of the service should be conducted, and that such a review would take time.
