Inconvenience for overseas Koreans living abroad who had to send powers of attorney by international mail to handle banking in South Korea is expected to ease. The government and the financial sector are pushing a service that converts consular-certified financial powers of attorney into electronic documents and delivers them directly to banks.

The Overseas Koreans Agency, the Financial Services Commission and the Korea Financial Telecommunications and Clearings Institute said on Tuesday they signed a memorandum of understanding with eight financial companies to promote a "digital consular-certified financial power of attorney service."

Until now, overseas Koreans had to send a financial power of attorney certified by an overseas diplomatic mission by international mail to a representative in South Korea. The process took from several days to several weeks, and concerns have been raised about loss or leaks of personal information.

Once the service is introduced, a financial power of attorney certified by a diplomatic mission will be transmitted immediately to a bank as an electronic document.

It will digitise powers of attorney issued to overseas Koreans and ethnic Koreans with foreign nationality for in-person financial transactions in South Korea and send them directly to designated banks.

This will allow domestic financial tasks to be handled more quickly without separate postal procedures. It also uses a blockchain-based system so banks can directly verify authenticity, reducing the risk of forgery and alteration, the statement said.

Eight institutions will initially participate in the service, including KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, NH NongHyup Bank, IBK Industrial Bank of Korea, Busan Bank and Korea Post. Participation is expected to expand as demand grows.

The service is set to launch in July after infrastructure is built and systems development is completed.

Kim Kyung-hyup (김경협), head of the Overseas Koreans Agency, said, "We will continue to expand digital civil service offerings that deliver high perceived benefits."

Kwon Dae-young (권대영), vice chairman of the Financial Services Commission, said it was "a meaningful starting point" to implement a nondiscriminatory, inclusive policy for overseas Koreans in the financial sector. He urged the financial industry to actively fulfil its social responsibilities.

Chae Byung-deuk (채병득), head of the Korea Financial Telecommunications and Clearings Institute, said, "We will support overseas Koreans so they can conduct financial transactions with peace of mind by using blockchain technology and other tools."