Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Korean financial firms seek 'digital revenues' in 2021
From left are KB Financial Group Chairman Yoon Jong-kyoo, Shinhan Financial Group Chairman Cho Yong-byoung, Hana Financial Group Chairman Kim Jung-tai and Woori Financial Group Chairman Son Tae-seung. Courtesy of each firm
By Lee Min-hyung
By Lee Min-hyung
The nation's major financial holding firms are looking to boost their digital revenue as part of a key management goal for 2021 amid the rapid rise of online banking and contactless consumption here and abroad.
For the major lenders, 2020 has been a year of building the foundations for their digital business. With uncertainties surrounding the COVID-19 pandemic remaining, they will keep enhancing their digital platforms next year, but a new focus will be on generating tangible outcomes from their digital vision.
Leaders of the top financial firms here ― KB, Shinhan, Hana and Woori ― have repeated a common pledge for digital transformation throughout 2020. With the beginning of the new year, they are likely to place more emphasis on how to reap the benefits from their digital platforms.
The top four have finished their year-end reshuffles with a focus on maintaining stability, rather than taking risks by undergoing a drastic shakeup of top management.
Under the reshuffle, most leaders of the groups' major affiliates have had their terms extended for a couple of years, but one notable change was that they did carry out organizational reshuffles with a focus on innovating their digital platforms.
KB Financial Group is standing at the forefront of the digital-first reshuffle. The nation's largest financial holding company created a “platform” unit and an artificial intelligence (AI) innovation center during its recent reorganization. The platform unit will dedicate itself to adding sophistication to the firm's digital businesses and advancing its online platforms.
“Our 2021 management priority is to achieve digital platform innovation, and turn the group and its major affiliates into the nation's most digitally agile financial companies,” an official from KB said. Introducing digital platforms and generating stable revenue therefore are the group's near-term priorities, according to the official.
Aside from digitization, the group is also seeking to widen its revenue streams in non-Korean markets and further raise its global profile.
Under the latest reshuffle, former KB Insurance CEO Yang Jong-hee has been appointed the group's vice chairman whose primary task is to take control of its global business. Of note is that KB recreated the position for the first time in a decade since it removed it in 2010, which displays the group's strong determination for global expansion.
KB Financial Group Chairman Yoon Jong-kyoo is also set to share a more concrete digital and global vision during a New Year address.
Shinhan Financial Group also picked digitization as its core management strategy for 2021.
Group Chairman Cho Yong-byoung will partner with Shinhan Bank CEO Jin Ok-dong for another two years after Jin succeeded in extending his term in recognition of his digital-first mindset.
Cho has underlined the need for the group to establish an objective tool for evaluating the group's digital performance. Starting from 2018, the group has unveiled its revenues from digital sales channels, a first among the nation's major financial firms.
The group has reported accumulated digital revenue of 904.4 billion won for the first three quarters of this year, up 39.4 percent from last year.
Shinhan expects its digital profits to jump further in 2021 thanks to its group-wide efforts to track digital performance.
“On the business front, expanding our digital performance is definitely the top management goal for Shinhan next year,” a spokesman said. “Another crucial goal is to better fulfill our drive for environmental, social and corporate governance throughout 2021.”
Hana Financial Group is also bracing for the digital paradigm shift by integrating three subdivisions ― future finance, and retail and asset management ― into a customer-oriented “digital retail group.”
“We are going to upgrade our mobile banking app into a lifestyle finance platform,” an official from the group said. “Toward that end, Hana will expand our partnerships with other platform providers in areas such as automobiles, travel, shopping or real estate ― and further digitize our mobile services for customers to enjoy wholly new experiences.”
Hana expects its investment in mobile and digital platforms to widen its revenue streams over the long term.
“The banking industry here is standing at a critical juncture amid big tech firms' rapid inroads into the financial sector,” the official said. “Hana will establish new growth momentum centered on platform finance and global banking in 2021.”
Woori Financial Group is utilizing group-wide efforts to jump on the digital paradigm shift next year under the slogan of “Digital First, Digital Initiative.”
In a recent year-end reorganization, Woori Bank formed a new unit dedicated to creating synergy in sales and digital banking, a move to enhance its performance in digital marketing for more digital revenue.
“The new unit will help us harmonize performance between sales and digital innovation,” an official from the lender said. “We are going to enhance our sales capacity in the area of non-face-to-face transactions by operating the unit.”
“The latest organizational reshuffle is aimed at cutting fixed costs and enhancing the efficiency of the group, while at the same time maximizing our sales capability with digital competitiveness next year,” the official said.