South Korea’s online-only lender K bank said Monday it plans to launch a new untact -- non face-to-face -- loan balance transfer service in the second half of this year, the first of its kind in the industry. 

Customers will have digital signatures registered to its own electronic system, so it can lend money instead of having to go through paper work needed to verify the authenticity of one’s seal certificate.

A loan balance transfer is a service that allows borrowers to move their outstanding debts, including credit card balance or personal loans, from the existing lender to another that offers a lower interest rate. The service will be used for mortgage lending for borrowers seeking financial backup for purchasing property.

Currently, borrowers should drop by community centers to receive a seal certificate, making any untact types of loan service impossible. 

If the digital signature project gets approval for commercial use, K bank will be allowed to provide the loan balance transfer service without any physical contact between the borrower and the lender. The service, however, will require borrowers’ legal representatives to print their digital signature and have them delivered to the lender.

K bank has worked jointly with the Korea Trade Network, a paperless trade service provider, to develop the new system, even as it has suspended its loan business over liquidity problems. 

By Choi Jae-hee (cjh@heraldcorp.com)