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.
Banking groups pledge for digital, non-banking growth in 2021
Seen above are headquarters of Korea's four major financial holding firms including KB, Shinhan, Hana and Woori. Courtesy of each firm
By Lee Min-hyung
By Lee Min-hyung
Leaders of the nation's major banking groups will focus on growth of their digital and non-banking businesses in 2021 amid widening financial volatilities across the globe, they said in their respective New Year's addresses, Monday.
Under the common goal to achieve “digital sustainability” in finance, they have pledged to speed up their digital transformation, a move to deal with the rapidly-changing financial environment with the rise of virus-induced non-face-to-face transactions here and abroad.
The financial chiefs also underlined the need to diversify their business portfolios into non-banking areas through M&As.
In a New Year speech, Shinhan Financial Group Chairman Cho Yong-byoung urged staff to have a resilient spirit in order to help the group tackle the financial volatility and turn looming crises into opportunities.
“The resilient spirit determines survival and growth of a company at a time when market uncertainties are growing with the arrival of the era of unpredictability,” Cho said. “The backbone of resilience is to identify risks and agilely deal with the challenge.”
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
The Shinhan leader has particularly stressed the importance of embracing digital transformation to tackle fast-changing financial volatility.
“Regardless of industry, all firms are going all-out to achieve digitization, and Shinhan is no exception,” he said. “All employees should achieve digital innovation with a team spirit, and toward that end, we need to make proactive investments in fintech and big tech companies with technological skills.”
KB Financial Group Chairman Yoon Jong-kyoo shared the group's 2021 management strategy of “reinforcing the core” in his New Year address.
“Each of our affiliates should strengthen their market status by realigning their roles with a balanced business portfolio,” he said. “We need to secure differentiated competitiveness to enhance our core business models and diversify our revenue sources.”
Yoon picked global expansion and non-banking growth as the two key pillars to achieve its sustainable growth.
“KB should continue to adopt a two-track global strategy focusing on Southeast Asian and other advanced markets, and increase our revenue portions there,” he said. “In Southeast Asia, we will keep looking for new business models with huge growth potential and seek chances for M&As there. KB will also strengthen its global competitiveness by signing more partnerships with renowned asset management firms and commercial investment banks in developed countries.”
The chief of the nation's biggest financial holding firm by market capitalization also shared its plan to expand its profile in the area of non-financial platforms.
“KB should utilize group-wide efforts for growth of its non-financial businesses. For this vision, we will expand investment in artificial intelligence and search for opportunities to enter untapped territories in the capital market.”
Woori Financial Group Chairman Son Tae-seung expressed his willingness to expand the group's business portfolio by acquiring non-banking financial players ― such as securities and insurance.
“It may be tough for us to clinch any sizable M&A deals in the short term due to the COVID-19-induced market downturn,” he said. “But we will keep expanding our portfolios for the group to gain growth momentum. Woori's key affiliates should strengthen their core competitiveness, while at the same time expanding new profit areas.”
Hana Financial Group Chairman Kim Jung-tai also reaffirmed the group's strong determination for digital growth in 2021 by pushing for what it called “platform finance.”
“Platform finance is the optimal tool to attract a wider base of customers, as the platform is the place where consumers and suppliers meet each other,” he said. “Customers experience all the services related with financial products in a platform. This is why we should build a lifestyle finance platform for customers to stay and enjoy benefits there.”
DB Group Chairman Kim Nam-ho has encouraged employees to have a digital mindset, saying digital capability stands at the forefront of determining a financial firm's competitiveness and survival.
“DB's employees and executives need to be ready for the future by working as if the financial firm were a digital company,” he said in a New Year's speech. “Our financial affiliates should focus on growth-driven management, rather than the stability-driven one. Please be aware that there is no survival without growth.”