Financial Holding Company Chairpersons Unite on 'Crisis,' 'Change,' and 'Innovation' (Comprehensive)

[Asia Economy Reporters Haeyoung Kwon, Minyoung Kim] The chairpersons of the five major financial holding companies identified "crisis," "survival," "change," and "innovation" as this year's management keywords in their New Year's addresses. Amid expectations that the financial sector will face an exceptionally challenging year due to the "triple burden" of global economic slowdown, low interest rates, and loan regulations, coupled with the accelerated entry of IT companies into the financial industry, domestic financial holding company chairpersons have called for strong changes and innovations to survive the crisis.

On the 2nd, KB Financial Group Chairman Yoon Jong-kyu stated, "The crisis is intensifying due to the global economic recession, instability in international financial markets, and the entrenchment of the 'three lows' phenomenon?low interest rates, low growth, and low inflation?in the domestic economy. With tech companies actively entering the financial industry, we are facing new competition and threats," emphasizing, "Whether we become a market-leading 'leader' or fall behind as a 'follower' depends on how we overcome and utilize the crisis."

On the same day, Shinhan Financial Group Chairman Cho Yong-byeong also said, "To become a subject that leads change rather than an object led by change in the era of the Fourth Industrial Revolution, we must transcend the boundaries of finance," urging, "Let us step out of our internal perspectives and collaborate with various domestic and international companies such as fintech and big tech, and attempt the fusion of knowledge beyond industries through broad industry-academic and public-private cooperation."

Shinhan Financial Group, ranked first among domestic financial holding companies in net profit, proposed "First-Class Shinhan" as this year's management keyword, conveying the aspiration to pursue a greater ideal beyond mere first place. The methodology of First-Class Shinhan emphasizes customer trust, openness in digital strategy, mergers and acquisitions (M&A), talent acquisition, and innovative finance supporting innovative ventures and small and medium-sized enterprises.

Hana Financial Group Chairman Kim Jung-tae suggested "reset" and "rebuild," stating that the successful formula of the past decade cannot guarantee growth and survival in the coming decade. He expressed, "Starbucks is now participating as a partner in a virtual currency (cryptocurrency) exchange, no longer just a simple coffee company but an 'unregulated bank.' Technological advancements are significantly breaking down industry boundaries," and added, "We must create new business models and processes for the group to generate social value for everyone's joy, not just customer satisfaction."

The unified emphasis on change by the financial holding company chairpersons is rooted in a sense of crisis due to the deteriorating financial business environment. This year, a decline in net interest margin (NIM) due to falling interest rates, an increase in potential bad debts due to economic downturn, and a slowdown in loan asset growth due to loan regulations are expected. The projected net income for this year of the four major financial holding companies?Shinhan, KB, Hana, and Woori?is 11.4196 trillion won, a 2.47% decrease compared to last year's annual estimate of 11.7094 trillion won.

Woori Financial Group Chairman Sohn Tae-seung said, "With prolonged external uncertainties and the continuation of the 'three lows' phenomenon?low growth, low interest rates, and low inflation?domestic and international economies are simultaneously in recession, making the environment surrounding the financial sector challenging again this year," urging a "renewed determination." NH Nonghyup Financial Group Chairman Kim Kwang-soo also emphasized, "No year has had perfect management conditions, but this year is particularly unusual, so we must prepare for the worst," and stressed, "Let us redesign Nonghyup Financial to achieve a harmonious balance between profitability and soundness, adapting to changes in the management environment and our era's mission."

Chairpersons of regional financial holding companies also emphasized innovation. BNK Financial Group Chairman Kim Ji-wan stated at the New Year's ceremony that, "As the 'framework of the financial industry' is changing due to open banking and the entry of ICT companies into finance, we must promote 'open innovation' that improves the entire sales process through flexible, customer-centric thinking and behavior and two-way communication with customers. We also need to expand overseas markets, establish BNK's unique financial models specialized for local markets, and strengthen organic cooperation among affiliates and business divisions."

This content was produced with the assistance of AI translation services.