What's behind the KB Securities-NCSOFT partnership?

By Kim Bo-eun

KB Financial Group Chairman Yoon Jong-kyoo

The unusual partnering of KB Securities and video game developer NCSOFT is drawing attention over how the two entities teamed up and how they will collaborate.

Both companies said they are currently discussing how they will work together, but said they were not yet at a stage to provide details.

"NCSOFT is known to have advanced artificial intelligence (AI) technology, and I believe this served as the basis of the partnership," a KB Financial official said.

It is the first time for a gaming company to enter the financial services sector.

The two companies may set up a joint entity offering AI-powered investment recommendation services similar to the one Shinhan Financial Group established.

Shinhan AI, launched last year, recommends investment products and portfolio composition to investors, based on personal information such as financial situation, investment goals and preferred risk level. IBM took part in the development of Shinhan NEO, an AI-based platform for investment advisory services. Shinhan partnered with the Canada-based global AI software provider Element AI on research for the development of the platform.

KB Financial Group's affiliates such as KB Kookmin Bank and KB Asset Management have offered investment products recommended by robo-advisers. Robo-advisers are digital platforms providing algorithm-driven financial planning services with minimized human supervision.

NCSOFT CEO Kim Taek-jin

“We set up an AI center in January 2016, and we have 150 members engaging in R&D,” an NCSOFT official said. “The technology that is being developed is not only limited to AI in games, but also other sectors.”

This includes the provision of AI-based data on professional baseball as well as AI technology for writing news articles. Within the AI center, there is another center dedicated to R&D of natural language processing technology.

Expectations are KB Securities could use this technology in its robo-adviser services.

The partnership came at a time when boundaries among sectors are being torn down. Financial companies are increasingly joining hands with ICT companies.

Hana Financial Group and SK Telecom set up the joint fintech firm Finnq, which provides loan comparison services based on data from the telecom company. Woori Financial Group has formed an alliance with telecommunications firm KT for “MyData,” which is the business of providing analysis on customers' scattered data from various sources. Woori and KT are considering setting up a similar joint entity.

This trend is accelerating as big tech firms make strides into the financial services sector. IT giants Naver established a financial services subsidiary in a partnership with the brokerage Mirae Asset Daewoo. Kakao has set up multiple fintech entities including the internet-based Kakao Bank. Kakao is working with Korea Investment Holdings. Bigtech companies pose a threat to existing financial firms due to their high-traffic capacity and huge user bases.