Following the introduction of bancassurance in 2003, the local first-tier banks have started rolling out “financial department stores,” which provide customers with both convenience and comprehensive services.

KB Financial Group on Thursday launched a complex branch, which would cover four major segments ― banking, securities, life insurance and nonlife insurance ― for the first time in the local banking industry in Yeouido, Seoul.
 

With the group’s concurrent operation of the nonlife insurance unit, KB Insurance Co., via the bank windows in particular, bank clients are allowed to buy the auto insurance policy as well as the current life insurance products.

Corporate clients will also likely make the best of the one-stop channel, linking their current cash transactions with a variety of nonlife insurance products, including occupational safety.

“The simultaneous operation of life and nonlife units at a bank branch marks the first of its case in the market. We will focus more on sufficient consideration of customer needs and their wider choice on a mid-term basis, rather than seeking a short-term performance,” said a group spokesman.

As KB Financial clarified that it would gradually add more complex-oriented branches, its competitors are expected to follow suit as the majority of insurance firms want to easily access financial consumers.

Major financial groups including Woori, Hana, Shinhan and NH Nonghyup have been successful in generating interaffiliate synergy by allowing customers to open securities accounts at bank branches over the past decade.

Meanwhile, it seems that some insurance firms, which do not belong to a parent group and have no bank affiliate, are discontent with these sorts of financial malls.

Seeking to have similar flexibility, the insurance industry recently filed a petition to financial authorities, asking for approval to sell bank services such as deposits, installments and loans.

They claim that “for nonbanking firms, the stores may result in an infringement on conventional business fields by large banking groups.”

Some insurers have reportedly finished their research on concurrent operations of the banking business.

The Financial Services Commission’s response has been lukewarm, citing the current laws limiting cross-business among different financial segments under a regulatory ceiling.

Some market insiders also say a certain extent of firewalls ― though the barriers have been eased over the past few years ― is still needed to minimize leakage of customers’ private information and block reckless loans at high rates.

By Kim Yon-se (kys@heraldcorp.com)