Korea Post expands financial services

Korea Post will expand financial services to mid- and low-income customers, as part of efforts to support the underprivileged and maintain its status as profit-seeking public firm, reports The Korea Herald. The article continues:

Namgung Min, president of Korea Post, told reporters on Wednesday that the agency will begin fund sales and issue credit cards soon after consulting with related ministries and financial regulators. Korea Post needs to get licenses to operate both financial businesses as a card issuer and fund sales agents.

The agency currently under the Ministry of Knowledge Economy will take risks in asset management to keep its interest rate high for low-income customers, the CEO said.

“Korea Post has been making stable investments mostly to national or public bonds and some to companies and local securities market,” Namgung said.

“But we will face risks in asset management from now on by investing in overseas funds and securities market to guarantee high returns for our customers in times of low deposit interest rates,” he said after his presentation on the new vision set for the agency. Korea Post celebrates its 10th anniversary as an independent postal and financial service provider.

Korea Post currently operates 50 trillion won worth of savings and 27 trillion won worth of insurance products. It aims to increase the size of savings to 100 trillion won and insurance products to 70 trillion won by 2020.

“I think Korea Post should expand its role as a state-run financial service provider for the underprivileged suffering from deepening economic polarization,” he said.

The CEO also stressed the need to secure a professional workforce to expand its financial service in the future and increase its autonomy in operating business.

“To operate high risk asset management, we need to have highly skilled professionals and also an upgraded incentive system to have them work for us,” he added.

The financial service sector by Korea Post has been helping the agency seek profits for the past years, unlike other privatised postal services agencies in the United States, the United Kingdom and Japan.

“I feel sorry for those who think the privatisation of postal services will always work. Korea Post has been seeking profits every year, for it operates financial service and also thanks to the automated mailing system,” he said.