"It will take more than 40 minutes to go through the full explanation. Would that be alright?"
At a branch of Bank A in Seoul on the morning of May 31, the teller first informed the customer about the lengthy sign-up process when asked to open a semiconductor exchange-traded fund (ETF) trust product.
ETF sales at the four major banks rose from 3.5299 trillion won in November last year to 6.6871 trillion won as of the 30th of this month, maintaining elevated levels. The sign-up process for the increasingly popular ETFs proved longer and more complex than expected.
Starting with an investor suitability assessment, the process continued with product structure explanations, risk disclosures, voice recordings, handwritten signatures, and verification steps, with similar questions repeated throughout. Less than 30 minutes into the sign-up process, going through every item in the product prospectus already felt overwhelming. The teller, seemingly trying to ease the customer's discomfort, kept up a brisk pace throughout the explanation.
For high-complexity products such as ETFs and products subject to the appropriateness principle, a voice recording of the investor suitability assessment results is mandatory regardless of age. This added even more time. When the clock was checked after the sign-up was complete, one hour and 10 minutes had passed — well beyond the initially quoted time.
The situation at a Bank B branch was not much different. Following an employee's recommendation that many investors diversify by investing in U.S. stocks through an Individual Retirement Pension (IRP) after signing up for a domestic stock ETF, the process took about 30 minutes for each product — roughly one hour in total. Having already completed an investor suitability assessment for the ETF, repeating it for the IRP was cumbersome. The branch employee explained that although the questions and answer choices were the same, the assessment had to be conducted again because the product type was different.
The non-face-to-face sign-up experience was an entirely different story. Without an employee's verbal guidance, the investor suitability assessment was completed within one minute. Although a mandatory video call was required for the product explanation, the entire sign-up process was finished within 10 minutes even including that step. Signing up for an ETF through a retirement pension on mobile took just four minutes. All it took was scrolling down without properly reading the content.
Financial consumer protection is being applied asymmetrically — in-branch sign-ups are excessively burdensome while mobile sign-ups can be completed without sufficient verification, meaning proper customer protection is not being achieved in either channel. Market participants say that while voice phishing prevention is important, consumer protection for high-complexity investment products, insurance sign-ups, and large-sum transfers at branches has become excessive and needs to be overhauled.
When the Seoul Economic Daily directly experienced the in-person ETF sign-up process at the four major commercial banks — KB Kookmin, Shinhan, Hana, and Woori — most took approximately one hour.
Given this situation, it is extremely common for bank employees to take customers' smartphones and complete the sign-up on their behalf during branch visits. Lee In-sil, former professor at Sogang University's Graduate School of Economics and former head of Statistics Korea, said, "Consumer protection regulations are being applied far too asymmetrically. The excessive consumer protection is generating unreasonable institutional costs."
Market participants warn that if the current situation persists, financial accessibility for elderly and vulnerable groups will decline and their asset returns will inevitably suffer. There are also concerns that, contrary to the intentions of policymakers and regulators, banks are being driven to steer customers toward digital sign-up channels, which could undermine substantive consumer protection and damage compensation.
Experts advise that in-person product sign-up procedures should be streamlined to focus on core information while simultaneously strengthening consumer protection for non-face-to-face sign-ups. Choi Chang-gyu, professor emeritus of economics at Myongji University, said, "There needs to be verification by a third-party organization to simplify and standardize the product explanation process for financial product sign-ups." A senior official at a major commercial bank also stressed, "When customers visit a branch with a clear intention to sign up, procedures should be partially streamlined to reduce the time required."
