Shinhan reshaping corporate image
By Kim Tong-hyung
Earnings reports suggest that Shinhan Financial Group, comfortably the country’s most successful financial services company by profit, is as ruthless a money-maker as there is.
Shinhan Chairman Han Dong-woo begs to differ as he continues to strengthen the group’s corporate social responsibility (CSR) activities and reshape its business models to convince customers and communities that what’s good for Shinhan will benefit a broader range of society.
``Successful companies should push their CSR efforts beyond just donations and think about what more they could do to strengthen the social and business ecosystems they are footed on,’’ said Han, who dubbed his corporate campaign ``compassionate finance.’’
``Compassionate finance is a goal that will need some time to generate a meaningful level of results. This would require dramatic changes in the mindset of our employees and how they approach customers,’’ he added, stressing that the renewed focus on CSR is changing the way Shinhan approaches its business models and main markets.
The group reported an annual net profit of 3.1 trillion won in 2011, finishing seventh in the Korean corporate table behind industrial giants Samsung Electronics, Hyundai Motor, SK, POSCO, Kia Motors and Hyundai Heavy Industries. No other financial company made the top 10.
It enjoys dual strength in both retail and corporate financing and an ideal balance between banking and non-banking divisions, thanks to the strengths of its main subsidiaries Shinhan Bank and Shinhan Card.
While its rivals struggle mightily to duplicate its success, Shinhan says that the compassionate finance campaign will help it stay ahead, not only in terms of public image, but also in business.
The big companies and high income-earners continue to be an essential part of its business and always will be. But through the strengthened focus on CSR, the group is now beginning to detect new opportunities in developing and sophisticating financial services for small- to medium-sized companies, startups and lower-income earners, according to Han. Apparently, cold, hard business isn’t always the best business.
The compassionate banking initiative goes beyond the group’s previous, donation-centered CSR scheme and focuses on designing new financial products tailored for low-income households and small- and medium-sized enterprises (SMEs) and integrating them into its overall business model.
To kick start the drive, Shinhan has identified 33 different projects, highlighted by its corporate success program (CSP) for financing promising but struggling SMEs.
Shinhan Bank has introduced a new program aimed at helping SMEs with high potential but suffering from temporary cash flow problems. The lender will provide these companies with more favorable loan conditions, including lower interest rates and flexible maturities.
Shinhan Card will postpone repayment deadlines by three to six months for customers whose livelihoods are damaged by typhoons, flash floods and other extreme weather conditions that are increasingly frequent as the country seems to be serving as a science project for global warming.
Shinhan is also involved in a wealth of micro-financing initiatives aimed at helping low-income earners and has connected more than 5,000 jobseekers to SMEs through its Job S.O.S 4U project that it has been managing since 2009.