A pedestrian walks past Shinhan Financial Group headquarters in Seoul. (Yonhap)
Shinhan Financial Group will invest in a delivery service provider and an autonomous transportation service startup to upgrade its banking platform and find new revenue streams amid increasing competition in the financial industry for digital transformation, the banking group said Monday.
The lender has pledged to make an investment worth 77 billion won ($67.21 million) into three digital platform companies by using a 300 billion-won fund launched by Shinhan affiliates including its credit card and insurance units in April.
The group vowed more aggressive investment to nurture promising startups to become unicorns in the third quarter to form digital alliance with platform companies in various fields frequently used by millennial and Gen Z customers.
“This investment shows Shinhan Financial Group’s strong willingness to push the boundary of finance and create new digital ecosystem,” a company official said.
Seeking to accelerate its digital transformation, the firm intends to drive traffic to its key platforms such as Shinhan Bank’s digital banking platform Shinhan SOL and Shinhan Card’s payment system PayFAN.
Global startups that can create synergy with its overseas business network are also under on Shinhan’s radar, it said.
As a strategic investor, the group also plans to tap into promising industries such as the self-driving transportation sector.
Of the investment round worth 77 billion won, delivery agency service provider Insung Data raised the largest amount of 45 billion won.
The firm runs Logiall, which has the largest market share in the country’s last-mile delivery market, which refers to the transportation of goods from a distribution hub to the final delivery destination.
“Shinhan Bank will collaborate with Insung Data in areas such as specialized delivery service and franchise recruitment for the delivery platform business,” Shinhan Financial Group said in a statement.
The partnership is expected to give impetus to Shinhan Bank’s blueprint to launch a new delivery platform, which will be the lender’s first attempt to jump into a nonfinancial business.
Some 30 billion won was allocated to 42dot, an autonomous transportation service startup.
42dot develops an urban mobility operating system, which is a mobility and logistics platform that integrates services like e-hailing, fleet management, demand-responsive transport and logistics.
“Together with 42dot, which is expected to be a key player in the future mobility market, we plan to take the lead in the autonomous driving mobility-related payment market,” the group said, adding that they plan to explore ways to jointly develop and provide new financial services in the smart city business as well.
Another area that Shinhan is paying attention to is the fast-growing pet care market to develop financial products targeting pet lovers.
PetEasy, which operates Banjjak, an online booking service for pet grooming with more than 1,000 franchises, will receive 2 billion won from Shinhan.
By Park Han-na (
hnpark@heraldcorp.com)