Grand Prize Foreign talent to help globalize Korean banks

By Deborah Cheok

The financial industry is one that is not constrained by geographical boundaries. With countries becoming more open and globalised, economies are increasingly interconnected.

As one of the most internationalized cities in Asia, Korea is no stranger to this global phenomenon.

Korea is a country that takes pride in nationalism. While it does build a people with a strong sense of national identity, it works as a double-edged sword.

According to Dobbs and Villinger from McKinsey’s Seoul Office, “South Korea must become more receptive to outside ideas and innovation… encourage more collaboration between domestic and foreign universities, schools, and businesses.”

To succeed in the financial sector or any other industries, it is inevitable that Korea welcomes foreigners, as they will be able to provide fresh perspectives to traditional methods.

Even though the topic of foreign talent has always been hotly debated in countries like Singapore (where there is a significant number of foreigners), the main idea is to be open to new ideas, be willing to accept foreign competition and an eagerness to learn from the key players in the industry.

As the saying goes ― “if you can’t beat them, join them” ― or in this case, have them join us.

To be a major global player in the financial industry, Koreans have to first learn to speak the language of the world ― English.

The ability to speak English opens doors of opportunities. Even though there are over 17,000 English tuition centers or “hagwon” in Korea, the results are still lacking in quality and quantity.

According to Wall Street Journal Asia, South Korea ranked 24th (just ahead of Japan and below Argentina and the Czech Republic) out of 60 countries worldwide in an English Proficiency Index survey in 2013, making Korea a mid-tier English speaking country on the global scale.

In a global financial environment, fluency in English is the minimum requirement. As mentioned in the article, one approach that Korea can take is to follow the footsteps of some Asian countries and make English the official language, if not, a compulsory second language in the education system.

Perhaps the first step to going global is to first go regional. Some Korean banks like the Korean Exchange Bank (KEB) and Woori Bank have started to establish operations in Asian countries like Singapore, Japan and Indonesia.

Although their presence may not be as strong, it provides a good start for those banking and financial companies.

The key is to understand and capture the needs of the local community where the company operates in, and provide the correct range of products and services that suit them.

For example, as a tiny city-state with limited places for exploration, Singaporeans love to travel abroad. Japanese insurance companies like MSIG and Tenet Sompo Insurance have identified this need and provides travel insurance products in Singapore.

Finding a niche market may also be a good way to create long-term success. For instance, the company may decide to specialize in investment or loan products, and be a market leader in that specific area.

Korea is known for outstanding companies that have managed to gain market share in industries of other countries.

When one thinks of motor vehicles, Hyundai comes to mind; when one thinks of electronics, Samsung and LG come to mind.

Huge reputable companies the likes of Hyundai and Samsung have gained the trust of many households around the world, for generations.

Just like how Hyundai has diversified into different industries like construction, manufacturing and electronics, successful Korean multinational companies can consider diversifying into the financial industry if it is in line with their current corporate goals.

Hence, the answer is a resounding yes ― Korea may very well one day produce strong and powerful global players in the financial sector.

In fact, the question is: Why not? Korea has one of the largest economies in the world, and there are established multinational companies like Hyundai, Samsung and LG that have the expertise and know-how to build global players in today’s competitive market.

However, changes must take place in the political and social environment in order for Korea to grow into a world-class financial hub. Base on the solid track record of Korean companies in various industries, I look forward to that day.