FI­NAN­CIAL DEALS GET SMARTER, CLEANER IN SOUTH KOREA

Source: Yon Hap News Agency, 13 Au­gust 2012

Insurance - - INDUSTRY UPDATES -

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.

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