Global, digital, trust - keywords for banks in 2020

Korea Federation of Banks (KFB) Chairman Kim Tae-young, front row center, stands with chiefs and executives of 23 banks at the KFB building in central Seoul, Dec. 23. / Courtesy of KFB

By Kim Bo-eun

Financial groups and lenders have set three keywords for 2020 to adapt to the digital era and low interest rates and regain consumer trust.

Chiefs of financial groups and banks outlined digitization, global expansion and restoring trust as main areas of focus in their New Year messages. These moves are also visible in the recent restructuring of their organizations.

Hana Financial Group Chairman Kim Jung-tai said the group needs to "lead innovation in digital finance to find new areas of business."

He added, "Through digital means and cooperation, the group needs to establish efficient processes and enhance customer and employee experience.”

Nonghyup Financial Group's chief Kim Gwang-soo noted: "The next 10 years are expected to bring much more changes than the past 100 years and will serve as a test bed of survival."

He emphasized the need for the group to switch its subsidiaries to digital finance firms and expand sources of non-interest income, non-banking sectors and global business to adapt to the era.

The Export Import Bank of Korea's Chairman Bang Moon-kyu said: "We should continue to push forward with digitization, and with the time and resources secured through doing so, we should concentrate on core tasks to boost competitiveness as a government financial institution.”

Financial groups are also set to expand overseas because of low interest rates here that are curbing banks' earnings.

KB Financial Group reorganized and created a new global division to boost its overseas business. The division will oversee the offshore businesses of all the group's affiliates and boost cooperation among them.

As for KB's bank, it created a vice president position overseeing digital finance.

Meanwhile, the banking sector has pledged to restore customer trust. This follows a case involving banks' mis-selling of financial derivative products ― referred to as derivative-linked funds (DLFs) ― that caused a huge stir last year.

The Financial Supervisory Service advised the banks last month to compensative victims, and the institutions have pledged to follow through.

Korea Federation of Banks Chairman Kim Tae-young stressed the importance of customer-centeredness.

"Banks need to change their paradigm of management to customer-centered management," he said in his New Year's message.

"Banks should enhance customer trust through establishing a customer-oriented sales culture and strengthening consumer protection systems.”

On Dec. 23, the heads of 23 banks nationwide resolved to regain consumer trust and practice customer-centric management.

Woori Financial Group Chairman Son Tae-seung pledged to restore customer trust at a New Year's event the group held in Namyangju, Gyeonggi Province, Wednesday. The bank changed its employee performance evaluation system last year to put more weight on consumer protection.

KEB Hana Bank also made strengthening consumer protection a key principle in its reorganization that took place last month.