Recently the profitability of the Korean banks began to improve, but it is still relatively lower than that of the banks of the developed countries and foreign branches of those countries in Korea. Furthermore the profit of the Korean banks deeply depends on the interest margin which is the traditional source of the bank's income.
The reason for low income and traditional income structure of the Korean banks is that the banks have not pursued the profit maximization and efficient management under the protection of the government and bank customers are not willing to pay the cost on the bank services which they used. But the recent changes of the financial environment such as the removal of interest control, lowering interest rates, and disintermediation make difficulty for the banks to earn the sufficient profit with the traditional income structure.
Thus Korean banks need to restructure the income structure through the change of the consumer's perception of the banking business as well as the efforts of banks to improve efficiency. To achieve this goal, the banks need to restructure the pricing system and charge the price on the consumers for using services from the banks. Developing the pricing system might induce the increasing profit, securing safety profit and restraining unnecessary usages of the bank services. Furthermore it can differentiate the competitiveness power among banks and strengthen the competitiveness power against the non-banks by promoting the development of the differentiated products.
To charge the price on the services might be very difficult for the banks because it might induce strong resistance of the bank customers. Thus banks needs to develop the well-designed pricing strategy and method, try to tell the inevitability of charging the price on the service and establish the fee strategy based on the management strategy.
은행 수수료체계 선진화 방안(The method of developing the service fee system in Korea)
[서울] : 한국금융연구원
|Series Title; No||정책조사보고서 / 2001-04|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|