Chief executives in the banking industry are moving to reach a consensus on slashing service fees on customer transactions amid mounting public anger over so-called corporate greed.
The move comes after a group of citizens has been holding a series of rallies against financial companies, criticized for raking in easy money by charging customers high service fees.
The banking services include remittance, internet banking and the use of automated teller machines. Commercial banks have faced criticism for providing what critics call hefty dividends to shareholders while being stingy about cutting service fees.
“Major commercial banks are preparing for a service fees cut amid the uneasy sentiment about the financial industry,” KB Kookmin Bank CEO Min Byong-deok said.
While Woori Bank became the first player to slash its fees earlier this week, its CEO, Lee Soon-woo, said he will push for additional measures to ease the burden on consumers.
Hana Bank CEO Kim Jung-tai said his bank will also participate in the move, adding that the slash would not be minimal, but drastic this time.
Shinhan Financial Group Chairman Han Dong-woo said the public anger is attributable to a failure in communication between financial industry employees and society.
He stressed the importance of bankers’ public relations activities in a bid to curb the opinion among citizens that financial companies harm society and only focus on profit.
Meanwhile, the bank CEOs argued that Korean banks are different from global investment banks, the main targets of protestors on Wall Street, which pay enormous amounts of dividends to shareholders.
They said Korean banks have been paying attention to social activities, including making donations to people in need.
Over the past few years, financial regulators continued to urge banks to find ways to benefit customers, such as cutting commission fees.
But several banks argue that service fees in the local market are not high compared to those of developed countries.
“Korean banks’ service charges are lower than those in major countries, including the United States,” a local banker said.
He also said service fees are discounted through a variety of preferential treatment policies.
In early September, the Financial Supervisory Service had to postpone instructing banks to slash service fees due to complaints from the banking sector.
“We had no choice but to omit it from the package of measures (to protect consumers) as several banks expressed uneasiness,” a high-ranking FSS official said.
Now FSS Gov. Kwon Hyouk-se has been instructing the banks again to reach a consensus and meet the social request.
By Kim Yon-se (
kys@heraldcorp.com)
