FINANCIAL DEALS GET SMARTER, CLEANER IN SOUTH KOREA
Source: Yon Hap News Agency, 13 August 2012
Signing a contract with insurers used to be a chore in South Korea. These days an employee at a local insurer simply takes a tablet computer when he leaves the office to meet his clients. The contracts are done by having clients sign the smart device.
A growing number of South Korean financial companies are embracing electronic signatures, or a paperless system that allows users to review contracts on smart devices and sign directly on the screen after a simple identity verification procedure.
According to a market source, one insurance company typically consumes 153 million sheets of paper every year (equivalent to 15,300 trees). The new contract process is not only simpler, but also cuts down paper usage which is good for the environment and save insurers huge costs. The government's eco-friendly stance and the country's top-notch information technology infrastructure gave birth to the new paper-free trend among South Korean insurers.
According to the Paris-based club of advanced economies report in July, the penetration rate of high-speed wireless Internet service in South Korea amounted to 100.6% as of the end of 2011, the highest among the 34 members of the Organization for Economic Cooperation and Development.
Since subscribers making contracts through the new method are increasing around three-fold every month, the non-life insurer expects the number of electronic contracts to hover above 10,000 in August alone.
Other financial firms are also jumping on the electronic signature bandwagon. South Korea's No. 2 life insurer Korea Life Insurance Co. adopted the eco-friendly system since May on increasing usage of the cutting edge technology within the industry.
Nonghyup Financial Holdings Co., the fifth-largest financial holding company in South Korea, adopted the electronic signing system in three of its banking operations. The bank said money transactions and transfers are now done through tablet screens, allowing it to reduce the amount of paper it consumes by 70% at the bank counter.
Financial firms that have not yet adopted the new system are getting ready to join the trend. South Korea's state-run Industrial Bank of Korea will switch to electronic documents early 2013, while a handful of other financial firms are preparing similar projects.
Market sources said as financial firms are providing incentives such as discounts to clients who choose the new method of electronic documents, their usage in the industry is expected to expand further in the second half of this year.
The electronic signature system has received mixed reviews from clients. Tech-savvy youths are more open to the new system. For older generations who are less familiar with smart devices, however, papers still have priority over tablet computers.