KB's digitization focuses on customers
The entrance of the KB Innovation Hub center in Gangnam-gu, Seoul / Courtesy of KB Financial Group
This is the first in a series of articles highlighting major financial groups' strategies for digital transformation.
By Jhoo Dong-chan
The financial business used to be one of the most conservative industries having not much to do with cutting-edge technologies.
The convergence of such a resistant-to-change business with high technology started emerging along with the growing demand for easier financial services.
Customers wanted to get simple banking services without visiting their banking branches. Investors also wanted to trade their stocks anywhere to better cope with market dynamics.
“What really matters most here is to understand what our customers and partners really want, not technology itself,” said KB Financial Group Digital Strategy Department General Manager Park Hyoung-joo.
“Some firms just introduce their new technologies regardless of market demand. It is more important to understand customers and their needs first. Technology comes next.”
Under incumbent KB Financial Group Chairman Yoon Jong-kyoo's vision for the group's digitization and better understating customers' needs, the group set up its Digital Strategy Department in 2016.
The department has engaged in the group's various efforts for digitization. Of them, the KB Innovation Hub symbolizes Chairman Yoon's vision for digitization.
KB Innovation Hub
The KB Innovation Hub is the financial group's incubator center for the nation's fintech startups. As of end-February, KB Financial Group is supporting 62 fintech startups at the incubator center.
These 62 startups have so far clinched 85 partnership deals, while attracting 15.9 billion won ($13.36 million) worth of investment from the financial group's subsidiaries.
“KB doesn't nominate startups on a regular basis like other financial groups' incubator centers do for promotional purpose,” Park said.
“These centers provide financial support and a venue for startups, but once their incubation term ends, they are on their own. It is really difficult for them to survive by themselves.”
The communication lounge at the KB Innovation Hub center in Gangnam-gu, Seoul / Courtesy of KB Financial Group
Unlike other incubator centers, KB first studies its subsidiaries' need in fintech, and then nominates startups based on these needs. Once selected as a KB Innovation Hub startup, KB offers various investment plans based on the startups' growth rate.
In the meantime, the KB Innovation Hub offers other services including loan, marketing, promotion, mentoring and legal consultation. Even after their incubation period, these fintech startups are given opportunities to continue their partnership with the group's subsidiaries.
Of the center's startups, Flyhigh, a financial security and authentication tech firm, has inked 11 partnership deals with KB subsidiaries, while clinching a 1 billion won investment from Corporate Venture Capital (CVC) in April. CVC is KB Financial Group's venture capital subsidiary.
FlyHigh was named as a KB Innovation Hub startup in 2017, and recorded an 83 percent year-on-year growth in sales last year. The operating profit also jumped 259 percent in the same period.
KB's three banking apps
There was a time when the nation's financial groups introduced a series of mobile apps for their subsidiaries, but the trend now is to integrate each subsidiary's app into one.
KB Financial Group had also conducted a similar process, but has maintained three apps where other financial groups now have one integrated app.
“KB has three apps _ Star Banking, Liiv and Liiv TalkTalk,” Park said.
“It's a trend to have one integrated mobile app. However, KB decided to maintain the three apps to better cope with customer demand. Star Banking is like a department store where customers can access all of KB's services.”
He added the Liiv and Liiv TalkTalk are more like convenience stores and bank tellers, respectively.
Liiv is an app that only provides the most-widely used banking services while Liiv TalkTalk features a messenger platform where customers can access services they want by sending a text message.
“Each customer has a different purpose when doing banking,” said Park.
“For those who engage in a wide range of financial services, the Star Banking app is probably the right one. The Liiv app is designed for customers who want quick access and transactions.”
Liiv TalkTalk, a messenger-like banking app for KB Kookmin Bank customers, displays KB's philosophy in its customer-centered approach.
“Still, there are a number of customers who want a human touch when they store their lifetime savings. Liiv TalkTalk assists such customers via text message communications.”