Seize the 170 Trillion Won “Dementia Money”: Banks Compete to Attract Dementia Customers

Commercial Banks Rush to Launch Dedicated Dementia Units and Trust Products
Financial Authorities Discuss Response Measures Since Late Last Year
Pilot Dementia Finance Education Programs Planned for the Second Half of the Year

As the aging population is expected to expand the so-called “dementia money” market—which refers to the financial assets of dementia patients—financial companies are stepping up their efforts to take the lead. This includes the establishment of dedicated organizations and the rollout of specialized financial products and services. Since the end of last year, financial authorities have also been working with financial institutions and related agencies to discuss ways to protect “dementia money,” and are seeking to establish comprehensive response systems to protect customers with dementia.

View original image

Among financial institutions, NH NongHyup Financial Group is taking the most active approach regarding dementia money. According to the financial sector on July 23, NH NongHyup plans to distribute guidelines for serving dementia customers to all of its branches next month. The intention is to leverage its extensive branch network, which covers even regions at risk of depopulation, to expand dementia customer protection services into rural areas.

The group is also operating the “Safe Care Project,” which is directly overseen by the holding company and involves participation from all seven subsidiaries, including its bank, insurance, securities, capital, and savings bank units. A total of 103 organizations nationwide are participating, from Seoul to Ulleung County. Seventy-seven organizations currently hold the “Leading Company for Dementia Overcoming” certification granted by dementia care centers under the Ministry of Health and Welfare, and there are plans to expand this to 93 locations.

Shinhan Bank launched its “Dementia Customer Financial Protection Task Force (TF)” in February and is building a company-wide response system to prevent financial accidents involving dementia customers, detect suspicious transactions, and prevent damage. Three branches—the Chungju Financial Center, the Chungju Yeonsu Branch, and the Chungju City Hall Temporary Branch—have received the Leading Company for Dementia Overcoming certification. Related products are also being operated, including the “Our Family Safe Care Service,” which allows families to check parents’ financial accounts and get notified of unusual transactions, as well as the Dementia Safe Trust product.

In August last year, Hana Bank established a dedicated unit called the Dementia Safe Financial Center to provide asset management solutions tailored to different stages of dementia. In November of the same year, it signed a memorandum of understanding (MOU) with the Seoul Metropolitan Dementia Center. Four Hana The Next Lounges in Euljiro, Seocho-dong, Yeongdeungpo, and Seolleung Station in Seoul have received the Leading Company for Dementia Overcoming certification.

These centers run the “Dementia Safe Academy” to support dementia prevention and asset protection. They also offer the “My Way Trust” service, which allows customers to pre-appoint a payment claim agent in preparation for dementia.

For senior customers, KB Kookmin Bank established the Golden Life Division in July last year and is currently operating 19 KB Golden Life Centers nationwide. The heads and staff of these centers have completed dementia partner training and obtained “Dementia Partner Certificates,” and in December last year, the bank launched the “KB Golden Life Dementia Safe Trust” to support financial management for dementia customers.

Woori Bank is promoting the “Woori Naeri Sarang Will Substitute Trust” as its representative dementia-related product. The “Woori Naeri Sarang Safe Trust” has also lowered its minimum subscription amount to 10 million won, and in the event the trustor develops dementia, medical expenses, care costs, and small monthly living expenses can be paid to an appointed trust administrator. The bank is also preparing a “Retirement Planning Trust” (tentative name) that will provide trust assets on a monthly basis in the event of diminished decision-making capacity due to dementia or other causes.

With frequent requests for collaboration from financial institutions, dementia care centers are considering establishing collaboration guidelines. The size of the “dementia money” market is estimated at nearly 170 trillion won, and as the market is expected to further expand due to the aging population, demand for collaboration between financial institutions and dementia care centers is rapidly increasing.

An official from a commercial bank explained, “The Leading Company for Dementia Overcoming is a certification granted by dementia care centers, which means official recognition by the government as a dementia partner company. It is an indicator of how much attention and responsiveness a financial institution shows regarding dementia issues.”

Since the end of last year, financial authorities have also been working with financial institutions and related agencies to find ways to better protect and manage the financial assets of dementia customers. In line with these developments, the Senior Financial Education Council will launch a pilot training program in the second half of this year to prevent financial exploitation and financial accidents targeting dementia customers among middle-aged and older adults.

An official from the financial sector said, “Dementia money should not only be about protecting the assets of dementia customers, but also approached as a productive financial practice that safely manages the assets of the elderly and enables smooth intergenerational transfer. A comprehensive response system covering fraud prevention, asset management, and trusts is essential.”

© The Asia Business Daily. All rights reserved. Unauthorized AI training and use prohibited.