Under new leadership, KT promoting digital finance
KT CEO Koo Hyun-mo, second from left, and Woori Financial Group Chairman Sohn Tae-seung, third from left, hold copies of an agreement after the two companies signed a non-binding memorandum of understanding (MoU) to jointly promote digital finance-centric business at Woori Bank's headquarters in downtown Seoul, Wednesday. Courtesy of KT
By Kim Yoo-chul
It really doesn't matter how good a company's strategy is. If that firm isn't skilled at what it does, its business strategy will not take it very far. KT CEO Koo Hyun-mo believes digital finance is its next focus in terms of boosting investor confidence.
Fintech is an emerging trend, with tech companies injecting more resources. It's fair to say KT isn't one of these disruptors, given its quite old-fashioned decision-making style, as KT is mainly owned by the National Pension Service, and it relies heavily on its less-volatile fixed-line business. But it is ideally positioned to expand businesses using customer data given its strengths in the fixed-line business.
Koo thinks KT's recent partnership with Woori Financial Group will demonstrate what it can do and define where it will go, as the two agreed to collaborate on integrating digital solutions and financial services.
In a statement, Wednesday, KT said it signed a non-binding memorandum of understanding (MOU) with Woori under which the two companies will cooperate closely in artificial intelligence (AI) and big data-based financial services. More importantly, they will share customer data. KT hopes for Woori Financial to eventually adopt relevant technology to introduce AI-based call centers and cloud-based remote working systems.
Specifically, KT is keeping an eye on the MyData business. This emerging trend in the fintech industry is to move towards a more human-centric model in personal data management and allow individuals to access and control their own data. KT is seeking how the MyData transformation being pursued by local banks could be supported with its business models.
KT officials didn't elaborate regarding the possibility of establishing a joint venture. Since Koo took power of Korea's dominant fixed-line operator, KT has been trying to create synergy using its own strengths. Efforts for external growth have been put on hold as Koo is better known for cutting costs by controlling expenses.
For the partnership with Woori, KT's credit card unit of BC Card has a 34 percent stake in K bank, an internet-only bank launched in 2017, while Woori bank, a flagship affiliate of Woori Financial, holds 19.9 percent. KT is dependent upon the already-saturated telecom business and it's battling with chief local rivals SK Telecom and LG Uplus. KT tried to expand its presence in the long-term evolution (LTE) telecom business in former Soviet bloc countries and some countries in Africa. However, it has yet to generate tangible results as barriers have been tough for a foreign telecom firm in terms of expanding its market penetration in the segment.
“Consumers will need banking services, but they may not turn to a bank to get them. Or, at least, maybe not what we think of as a bank today. The so-called sharing economy may have started with cars, taxis and accommodation, but financial services will follow soon enough. The sharing economy refers to decentralized asset ownership and using information technology to find efficient matches between providers and users of capital, rather than automatically turning to a bank as an intermediary,” global consultancy PwC said in a recent note to clients.