As of April 5, the financial sector said the Financial Services Commission had planned to pursue fee cuts in the first half of this year, but has slowed its pace after pushback from the fintech industry.
With platforms and savings banks still far apart, the commission plans to gather additional views from both sides.
The two sides have clashed since last year over fees for refinancing loans at so-called second-tier financial institutions. Fintech platforms currently charge 0.8% to 1.3% to broker refinancing loans at nonbank lenders, up to about 10 times the 0.08% to 0.18% charged for commercial bank loans.
Savings banks argue the fees should be lowered to commercial bank levels. Their annual payments to major loan-comparison platforms are estimated at 220 billion to 230 billion won. The industry has told the commission it would use any savings from lower platform fees entirely to cut loan interest rates.
Fintech firms counter that treating the fees as a simple cost is unfair and could shrink inclusive finance. They say borrowers using smaller fintech platforms tend to have lower credit scores, making the customer base riskier than that of commercial banks and pushing up the upper end of fees.
Fintech executives also warn that fee caps could threaten the survival of smaller platforms. One industry official said savings banks earn fee income whenever they collect loan interest, while fintech platforms receive a fee only once, when a loan is executed. “The user base is fundamentally different, so it makes no sense to demand a blanket cut to commercial bank levels,” the official said. Another fintech official said bank loan agents take fees as high as 3%, while fintech platforms receive about half that, adding that fairness should be considered because the change could reduce borrowing opportunities for mid- to low-credit customers.
As a compromise, officials are discussing first cutting referral fees for policy-backed loans for low-income borrowers, such as Haetsal Loan. The idea is to lower fees on policy products first and test whether borrowers see a meaningful reduction in interest rates.
* This article has been translated by AI.
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