Can North Jeolla Province become Korea's 3rd financial hub?
An artist's rendering of a financial town planned for Jeonju, North Jeolla Province, as part of the province's push to secure a government designation as a financial hub. Slated for completion in 2030, the complex will feature a 31-story international financial center, luxury hotel, conference facilities and office space for startups. Courtesy of North Jeolla Province
Ambition rests heavily on National Pension Service incentives
North Jeolla Province is betting on the National Pension Service (NPS), which manages 1.6 quadrillion won ($1.2 trillion) in assets, to help transform the region into Korea's third financial hub.
But while the world's third-largest pension fund has drawn a growing number of asset managers to the region, infrastructure gaps and difficulties in attracting financial talent are raising questions about whether the ambition can become reality, industry officials said Tuesday.
Located about 250 kilometers south of Seoul, North Jeolla Province has traditionally been known for its agricultural roots and cultural heritage. That began to change in 2015, when the NPS relocated to Jeonju, the province's largest city.
Domestic and foreign asset managers are flocking to Jeonju to deepen ties with the NPS. In June, the NPS began awarding an additional point to asset managers with a presence in Jeonju for selecting investment managers.
From global asset managers such as BlackRock, Blackstone, BNY, Franklin Templeton and PIMCO, to domestic players including Mirae Asset, Samsung, Hanwha and KB Asset Management, Jeonju now hosts the offices of around 40 financial firms.
The NPS expects that number to rise to around 50 by the end of the year.
Headquarters of the National Pension Service (NPS) in Jeonju, North Jeolla Province / Courtesy of the NPS
The growing presence of financial firms is giving momentum to North Jeolla Province's ambitions to revitalize the regional economy.
On Jan. 29, the provincial government submitted a plan to the Financial Services Commission (FSC) to transform a 3.59-square-kilometer area in Jeonju into a financial hub.
Korea's financial hub policy aims to enhance the country's financial competitiveness by clustering financial institutions in designated areas. Seoul's Yeouido area and Busan's Munhyeon neighborhood were the first to receive the designation in 2008. No additional financial hubs have been designated since.
Once designated as a financial hub, a region becomes eligible for policy support to improve its financial infrastructure, including incentives such as reductions in corporate and income taxes.
The province previously sought financial hub designation in 2019, but the bid was put on hold amid concerns that the region's financial industry and supporting infrastructure were not yet sufficiently developed.
"The city government plans to work closely with North Jeolla Province to secure the designation, highlighting the region's focus on asset management, agrifood and climate and energy finance as a way to differentiate it from existing financial centers," a Jeonju city official said.
The FSC has formed a 12-member evaluation panel comprising experts in economics, finance and law. The commission is expected to decide whether to grant the province the designation by year-end, based on the panel's findings.
National Pension Service (NPS) Chairman Kim Sung-joo, fifth from left, poses with executives from DWS Group after the Deutsche Bank-affiliated asset manager opened an office in Jeonju, North Jeolla Province, Monday. Courtesy of NPS
Expectations are growing that the province will secure the designation this time, buoyed by President Lee Jae Myung's endorsement of the initiative during a press conference in June marking his first year in office.
The bid also aligns with the government's broader push to relocate public institutions outside the Seoul metropolitan area to promote regional development.
However, industry officials caution that the establishment of local offices does not translate into growth in the regional financial industry.
Core functions, including investment decisions, portfolio adjustments and risk management, remain concentrated at firms' Seoul headquarters. Some asset managers reportedly rely on Seoul-based employees traveling to Jeonju, rather than maintaining a permanent local workforce.
"With most financial firms still operating primarily in Seoul, transferring significant numbers of employees to Jeonju is no easy task," an asset management official said. "Finding qualified professionals in Jeonju with the necessary experience is also difficult."
Even the NPS itself has struggled to attract talent since relocating to Jeonju. In August, its fund management arm filled just 18 of 26 positions in a recruitment drive for experienced professionals. Its first entry-level recruitment in four years also drew only 62 applicants for five openings.
Shin Se-don, professor emeritus of economics at Sookmyung Women's University, expressed skepticism about the initiative's chances of success.
"Busan has been trying to establish itself as a stock market hub for decades, but has it succeeded?" A financial hub develops over many years as investors, financial institutions and supporting infrastructure come together," Shin said.
"It cannot simply be created by relocating a few institutions."