Traditional banks support online mortgage services to compete with KakaoBank

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South Korea’s mainstream banks are planning to expand online and mobile mortgage services this month, clearly aiming to gain the upper hand over the fast-growing KakaoBank, which has announced its plan to launch 100 percent online home loan services.

Online banks such as KakaoBank and K Bank have gained popularity for their contactless lending services, but the mortgage market is still dominated by traditional lenders who still prefer to receive real estate documents offline.

Of the 752.2 trillion won ($ 652.9 billion) of mortgages issued by local lenders to households at the end of June, an average of 5 percent was issued through online and mobile services, according to data provided by banks.

But KakaoBank’s plan to introduce “100 percent” online mortgages this year has brought local banks to the fore, despite concerns over the practicality of a mobile bank plan for the mortgage sector, which requires a long list of files.

KB Kookmin Bank, the leading lender to the country’s # 1 banking group in terms of net income, plans to lower the bar for its online and mobile borrowers from the end of this month. Clients seeking a mortgage on co-owned property, property worth more than 900 million won in areas designated by the government as “overheated” and those “temporarily registered” prior to actual registration will be able to apply for the service. Previously, KB Kookmin, like all the traditional banks here, requested offline applications for such borrowers due to the complex document and approval process.

Personalized services will also be added to their apps that provide borrowers with the best mortgage products based on their credit ratings and interest rates.

Industry rival KB Kookmin, Shinhan Bank, said it is developing an electronic processing system for mortgage-related documents that will allow customers to minimize visits to its regular branches. The company said the system will be adapted for mobile and online services this month.

Meanwhile, NH NongHyup Bank plans to expand the list of properties for online and mobile mortgages. Currently, he only deals with apartments, but low-rise buildings, called local “villas”, or one-room apartments, called “offices”, will be added to the list. Mortgage refinancing, which basically replaces the borrower’s existing mortgage with a new loan, usually with a lower interest rate, and related services are currently being revised to be added to the lender’s mobile and online services, according to NH NongHyup.

Lenders’ traditional move to expand services comes after KakaoBank, which plans to go public on Friday on the main national stock exchange Kospi, announced last month that it will roll out mortgage products that will be “100 percent” mobile or online by the end of this year. year. But skeptics say that due to security concerns with filing documents related to real estate, which currently requires customers to make at least one offline visit to the bank, coupled with tightening financial authorities’ scrutiny of home loans, KakaoBank is facing obstacles. when developing a program.

Posted by Jung Min Kyung (mkjung@heraldcorp.com)





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