Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
INTERVIEW 'Agile innovation is key to success in financial markets in post COVID-19 era'
Hyun Jong-hoon, country manager at ING Bank in Korea and chairman of Foreign Bankers Group, poses for a photo at ING Bank Seoul Branch during an interview with The Korea Times on July 16. / Korea Times photo by Choi Won-suk
By Anna J. Park
ING chief stresses transparent yet flexible application of regulations to boost Seoul's attractiveness as global financial hub
By Anna J. Park
It's been more than 30 years since Hyun Jong-hoon, Country Manager at ING Bank in Korea, began his career in the global financial industry. Following his time spent at Citibank, Chase Manhattan Bank and Credit Suisse First Boston, the soft-spoken 57-year-old joined ING Bank's Seoul branch in 2001, and has been stably leading the Amsterdam-based global bank's business here since 2012.
Based on his decades of expertise in global banking, he was picked last year to serve as chairman of the Foreign Bankers Group (FBG) ― an association of 49 foreign banks from 20 countries with a business presence in Korea.
During a recent interview with The Korea Times at his office in central Seoul, Hyun talked about his ideas on what the government could do to bring in more global financial institutions, Korea's advantages as a capital market and his successful strategies for leading ING Bank in Korea.
Hurdles for Seoul to be financial hub
Hyun might be the best one to answer why Korea is not further developing as a key financial hub, and why the government's ambitious initiatives to become such keep failing. As FBG chairman, he must've directly listened to foreign banks' frank discussions of the hardships of running businesses in Korea.
Despite the government's longtime wish to make the nation a financial hub of Northeast Asia, Seoul's ranking still lags far behind those of Hong Kong and Singapore. According to the Global Financial Centres Index (GFCI) in March this year, Seoul was ranked 33rd, while its regional neighbors Tokyo, Shanghai, Singapore and Hong Kong took the list's third to sixth places, respectively. Seoul took the sixth spot in the GFCI's list of “centers likely to be more significant,” yet that only shows the city's potential, not the current reality.
Regarding the matter, the savvy financial leader said Korea's 52-hour workweek, as well as regulations and a taxation system that are heavier than other financial centers like Hong Kong and Singapore, could be part of what's deterring global financial institutions' relocation to Seoul.
“The key attractiveness of a financial hub would be two-pronged: effectiveness in a country's infrastructure and friendly efficiency in convenience. While the intentions of such regulations are well-understood, their rigid application doesn't seem that desirable. Allowing transparent flexibility in an exceptional range of cases would be necessary,” he said.
He explained it's all about how much convenience in terms of taxation and regulation a country can offer to global financial institutions, if it aims to promote itself as a global financial hub.
“Since Korea's legal and taxation systems were not made with the sole purpose of establishing the country as a global financial hub in the first place, drastic changes would be needed for it to be attractive enough for global financial companies to relocate here; this would then require a national and social consensus,” Hyun added, implying that it wouldn't be an easy matter and would require a great deal of social discussion.
However, Hyun said he highly evaluated the National Assembly's move earlier this year to revise the domestic capital market act to alleviate the nation's strict firewall regulations, which have prohibited global financial institutions from conducting business efficiently.
“I think it is one of greatest progresses ever made, as the strict firewall regulation between banking and securities has been one of the harshest hindrances for foreign financial firms, creating various levels of inefficiencies,” he said, explaining that most European countries adopt a universal banking system under which banks are allowed to operate securities businesses.
Korea's strengths as financial market
While global financial firms may still be reluctant to relocate their Asian headquarters to Seoul, Hyun stressed that Korea is a profoundly attractive financial market for foreign investors.
“Korea has many conglomerates that are truly multinational in their growth and operation. As one of the key functions of foreign banks is providing network financing to global companies, we are creating synergy together with Korean companies' exponential growth in overseas markets,” he said.
He said another big attraction for foreign banking businesses is Korea's well-developed derivatives market based on treasury bonds' sophisticated yield curves.
“Korea's treasury bond market is very mature. It is the world's 13th-largest bond market, where foreign investors take up 17 percent of the market. The Korean government bond's yield curves are densely developed, even to a 50-year maturity. Such a well-developed bond market is not common even among OECD countries,” Hyun pointed out, adding that the Korean won is also used often as a proxy hedge to manage currency risks in many Asian countries.
Alternative investment markets are also expected to further grow in Korea, ranging from private equity and private debt to real estate infrastructure investments.
Innovation-driven leadership for post COVID-19 era
Besides his leading role at Foreign Bankers Group (FBG), Hyun has been stably managing ING Bank's operation in Korea. Since opening its first Seoul branch back in 1991, the Amsterdam-headquartered ING Bank has developed a particular forte for dealing various fixed-income products in the Korean financial market, such as foreign exchange (FX) spot, foreign exchange forward, cross-currency swap and interest rate swap (IRS).
Another strength of ING Bank is that it has shifted the operation system of its wholesale banking to a “sector coverage model,” under which banking businesses are managed by sectors or industry groups. Hyun explained that the sector coverage model has boosted the bank's expertise, enabling the global lender to swiftly and proactively respond to clients' demands. This new wholesale banking model resulted in positive outcomes, especially when it comes to project financing for Korean companies' advancement into overseas market, using ING's global networking.
Aiming to continue the bank's success, Hyun stressed the significance of innovation. He predicted that the post-coronavirus era will witness major changes at even faster rates, and that's why an open mindset toward agile innovation is all the more important.
Actually, an innovative mindset is the personal secret for Hyun's long-term success in the industry; he said he tries to be always open to adapt to swiftly changing financial environments by refusing to stick to the past.
“Innovation is easier said than done. As ING Bank implements agile innovation as a strategic focus, we continue asking ourselves how to innovate and differentiate ourselves in this fast-changing society,” he said.
Lastly, Hyun emphasized that earning and maintaining client trust has always been and will continue to be the top priority for banks.
“I think a bank's primary asset is client trust,” he said. “If we lose trust, we lose everything.”