Leaders of traditional banks say growing clout of Big Techs, fintechs are threats
From left: KB Financial Group Chairman Yoon Jong-kyoo, Shinhan Financial Group Chairman Cho Yong-byoung, Woori Financial Group Chairman Sohn Tae-seung, Hana Financial Group Chairman Kim Jung-tai and NongHyup Financial Group Chairman Son Byung-hwan (Photos provided by firms)
Heads of South Korea’s top five traditional banking groups on Monday pointed to swift digital transformation and bolstering competitiveness of diverse business units as the main requirements for their survival in the new year.
KB Financial Group, the nation’s No. 1 banking group in terms of total assets, must become the nation’s top financial platform and provide customers with the best digital services, its Chairman Yoon Jong-kyoo said in his New Year’s speech.
Yoon highlighted KB’s interim goal focusing on bolstering its core financial competitiveness, expansion of global and nonfinancial businesses, boosting the role of its mobile and online banking platform, securing a unique pool of environmental, social and governance, or ESG, leadership and pursuit of a creative and open organization.
He called for KB employees to provide customers with high quality, high speed and low-cost services through a customer-oriented mindset.
KB’s industry rival Shinhan Financial Group’s Chairman Cho Yong-byoung told employees that the firm’s digital platform must be operated “rightly, swiftly and differently” to compete with Big Tech and fintech firms.
“Internet-only banks and Big Tech’s new moves have been leading the changes in the financial market,” Cho said in his New Year’s speech.
“Customers today are moved by the different experiences that financial institutions can provide for them, instead of the firms’ size or profit. We must provide various solutions as a financial group for a better future,” he added.
Shinhan celebrates its 40th anniversary this year.
Woori Financial Group Chairman Sohn Tae-seung set “completion of the banking group’s transformation into a digital-based business” as a key goal for 2022. Expansion of profit and growth platforms, pursuit of new digitalization, fostering wealth management, corporate investment banking and global business, bolstering preemptive risk-management measures and boosting corporate culture and adoption of ESG values were marked as pillars for this year’s corporate growth goals.
Meanwhile, Hana Financial Group Chairman Kim Jung-tai said that while digital transformation is crucial, fostering the offline channels that Big Tech and fintech firms still lack could help them make headway.
“Investment and cooperation with innovative businesses must be actively pursued for our corporate customers that face hurdles in working with Big Tech,” Kim said.
NongHyup Financial Group Chairman Son Byung-hwan highlighted the firm’s 10-year anniversary after adopting a holding company structure in 2012.
“We hope this year will be an opportunity to look back on NongHyup’s path and paint a new future for the group,” Son told his employees.
“I ask my employees to pursue digital business from a customer perspective.”
Though the top five banking groups have so far posted record-breaking profits this year, Big Tech financial services and fintech platforms have been growing at an unprecedented speed.
KakaoBank, affiliated with Kakao Corp., the operator of the country’s dominant messaging app KakaoTalk, saw its cumulative net profit in the January-September period last year jump 95 percent on-year to 167.9 billion won ($141 million). The bank had 17.4 million users as of end-September 2021, up from 15.4 million users at the end of 2020.
KB said in October last year that its net profit in the first nine months of the year came to 3.7 trillion won, eclipsing last year’s annual net profit. It is currently South Korea’s No. 1 banking group by assets, holding 650.5 trillion won as of end-September.
By Jung Min-kyung (email@example.com