Hana aims to be digital platform company

This is the second in a series of articles highlighting major financial groups' strategies for digital transformation. ― ED.

By Lee Kyung-min

Hana Financial Group has a clear objective that differentiates the holding company from its competitors: becoming a fully data-based entity to fundamentally transform itself from a traditional financial services provider to a digital platform company.

Under the new vision created by Chairman Kim Jung-tai to reinvent the group as a digital information services provider, a group-wide effort is ongoing to help workers set new goals prioritizing a customer-oriented mindset and embracing new challenges through cooperation among subsidiaries.

“We set new goals prioritizing customer-oriented mindset, challenge, cooperation, action and taking initiatives,” chairman Kim said during a ceremony to unveil the group's digital vision in November.

“These values will be integrated into a new governance structure whereby separate departments are merged in an organic manner to help improve agility to become more flexible and faster in the rapidly changing business environment,” he added.

The group's flagship and most lucrative subsidiary KEB Hana Bank is the first to take the initiative to become a leading, competent bank.

Bank CEO Ji Sung-kyoo declared that he would prioritize digitization and globalization, with a large focus on becoming a data-based entity, in line with the group's top initiative.

“This goal is particularly notable as it will clearly set the bank apart from its competitors which the group says only consider digitization as a mere tool to help their business strategies,” a Hana Financial Group official said.

The bank plans to boost income derived from its overseas businesses mainly via expansion in Southeast Asia, a region recently emerging as a key alternative to Korea's major foreign policy partners.

The group plans to put greater emphasis on bolstering the ongoing business ties between the bank and LINE Financial Asia, with which PT Bank KEB Hana Indonesia signed a share subscription agreement in October 2018 to strengthen the group's banking there.

LINE is expected to foster Hana's digital banking, fully capitalizing on its strong brand recognition, user-heavy platform and rich content in Indonesia.

This will help the group with strengthening capabilities overseas amid the domestic market that has nearly saturated.

“Running a business there will help banks go beyond poaching customers from one another, the current rule of the market,” the official added.

This will help the bank increase the net income derived from overseas profit to 40 percent from the current 13 percent by 2025, an objective called Vision 2540.

Equally to be pursued alongside the move to boost closer cooperation with such ICT firm is enhancing the Global Loyalty Network (GLN) digital platform, a blockchain-based technology that enables customers to make digital transactions regardless of their location via the decentralized system.

The integrated platform network allows financial services firms, retailers and card point management firms to use shared digital platforms to exchange digitally convertible commodities including points and mileage.

“The platform is a prime example of how a financial services firm whose primary role thus far involves lending and making interest income will expand to include businesses in the digital world,” a group official said.