A model is with a “Digital Window” of Shinhan Bank which has been installed at the bank’s branches across the country saving paperworks for its customers and boosting productivity convenience and customers at the same time.(Photo: Shinhan Bank)

"Please sign the documents on the areas that are highlighted.” Bank customers in Korea are accustomed to that phrase when opening bank accounts or applying for credit cards. Many customers sign the documents without knowing what they are agreeing to.

The experience of signing a bunch of papers at the bank could disappear in the near future. Banks will replace traditional paperwork with more digitalized forms using tablets and computers. Many institutions hope this can improve productivity for both banks and customers.

Shinhan Bank began operating the “digital windows” at branches on March 15. The bank has installed 7,000 tablets at banks across the country. Customers can write their names and sign papers on the devices.

In the past, customers opening bank accounts with debit cards have needed to sign their names 28 times on 14 documents. But they now can sign just five times using the tablet. This will cut the processing time from 15 minutes to 7 minutes, the bank said.

Shinhan ran a pilot program using tablets at some of its branches at the end of last year. “We thought relatively older customers would prefer using paper documents but they liked the digitalized one more, as many are already used to using their own smartphones, while they also can zoom in when using devices,” said Han Dong-young, a manager at Shinhan. “Bank clerks were also satisfied with the new idea, as some of their jobs that they thought unproductive have been reduced.”

Shinhan said it will be able to save 16 million pages a year, which cost about 600 million won ($522,000), by using tablet devices. Each branch needed to send their documents to the headquarters in Seoul everyday by scanning records, but the digitized records eliminate this process.

Industrial Bank of Korea was the first to adopt the idea of paperless windows. The bank distributed tablets to its workers in every branch in December 2015.

The bank used both paper documents and tablet devices, but planned to use tablets more often. IBK said much of its daily work is done through tablets, and they are saving money because of the initiative.

KEB Hana Bank also plans to adopt paperless windows in the country. 

Hana is running a campaign saying “let’s work smarter.”

Financial institutions’ paperless projects began in 2011 when then-President Lee Myung-bak called for “green growth.” One of the biggest reasons was that financial institutions used 7.1 billion sheets of copy paper a year in 2010, or 20 percent of the total paper used in the country. Banks used 2.5 billion sheets of paper a year, or 10 million sheets a day on average.

Back then, tablets cost more than 2 million won apiece, so wide-scale use wasn’t feasible for many banks. As the prices have continued to fall, banks are now purchasing them en masse. Local banks also are trying to stop using paper banknotes. They are offering customrs financial benefits such as exempting them from charges if they use electronic banknotes.

According to the Financial Supervisory Service, it costs about 300 won to make a paper bankbook, but the cost rises to 18,000 won including management and labor costs. As of now, banks give out bankbook to customers for free when they open new accounts and charge them 2,000 won when they ask for new ones. Bankbook holders pay about 6 billion won a year to reapply for new books if they are damaged or lost.

The FSS, in fact, announced its plans to reduce the number of paper banknotes issued in 2015. The plan includes not allowing banks to issue bankbook to new customers starting in September. But they will make exceptions to customers who are older than 60 and those who really want to have such bankbooks.

Starting in September 2020, the FSS will require local banks to charge customers who request a bankbook. There will be exceptions for those older than 60.

Paper bankbooks were introduced in Korea in 1897. It took about 120 years for them to start disappearing. 

But some worry that the change is too radical, since more than 70 percent of new customers receive a bankbook. “It is true that some Koreans are not feeling comfortable paying charges to get paper banknotes starting from 2020,” said Park Bum-joon, a director at FSS. “We will hear various concerns before actually taking actions.”