Jin Ok-dong: "Do Not Sell Investment Products Unless Fully Sold"

"Customer, Customer, Customer" Jin Ok-dong, Shinhan Bank President, Establishes First Practical Management Plan Since Inauguration
Emphasizing Consumer Protection Over Growth in Size and Profit... Attention on Whether It Will Change the Competitive Landscape of Growth-Oriented Leading Banks

[Asia Economy Reporter Haeyoung Kwon] "If it is not a complete sale, then rather do not sell investment products."

Jin Ok-dong, CEO of Shinhan Bank, is continuously delivering consumer protection messages to employees. Last year, Shinhan Bank pursued relatively aggressive sales, but this year it plans to focus on building trust and achieving first-class status rather than asset and profit growth. This year draws attention in the financial sector as it is the first year that CEO Jin's vision is reflected in Shinhan Bank's management plan.

According to the financial sector on the 11th, CEO Jin emphasized consumer protection and complete sales at the 2020 first half management strategy meeting held last week.

He said, "We must create a first-class Shinhan that receives unwavering trust from customers, not a leading bank based on profit and loss as in the past," adding, "Customers must be the standard for all decisions, and consumer protection, compliance, and internal control must precede the implementation of sales strategies."

This year, CEO Jin plans to focus on securing consumer trust and strengthening internal stability rather than asset and profit growth. He stressed the need to return to basics as the trust of the entire banking sector, including sellers, was shaken by overseas interest rate-linked derivative-linked funds (DLF) and Lime Asset Management incidents.

Shinhan Bank has lowered its net profit target by about 10% compared to the previous year. It is unprecedented for a CEO of a sales organization to announce a profit decrease in a non-crisis situation such as the 1997 IMF foreign exchange crisis or the 2008 global financial crisis. The growth target for won-denominated loan assets this year is also set at the 3% level, about half of last year's 7% growth. Although the decline in net interest margin (NIM) due to falling interest rates should be offset by loan asset expansion, government regulations and economic uncertainty make it difficult to increase loans recklessly, leading to conservative target setting. Excessive expansion of non-interest income will also be avoided.

Instead, CEO Jin repeatedly emphasizes consumer protection. From this year, the 'Together Growth Evaluation System,' which reorganizes the core performance indicator (KPI) system from the consumer perspective, was introduced, and from this month, the 'Investment Product Sales Suspension' system will be implemented based on undercover inspections at branches. To prevent incomplete sales of investment products by strengthening internal control functions, the audit department plans to reinforce about 50 personnel and the compliance department about 80 personnel.

A Shinhan Bank official said, "Recently, securing customer trust has emerged as the most important issue in the banking sector due to incomplete sales of investment products," adding, "CEO Jin emphasizes management that prioritizes customer trust over profit competition."

The financial sector expects that by CEO Jin emphasizing consumer protection and actively reflecting his vision in this year's management plan, the competition for leading banks focused on scale and profit will come to an end.

When CEO Jin started his duties as Shinhan Bank president in March last year, an aggressive sales plan established by the previous CEO had already passed the board of directors. In fact, the previous CEO showed an aggressive approach in attracting public funds and sales promotion, and Shinhan Bank's sales last year did not deviate much from this.

A financial sector official said, "In recent years, Shinhan Bank pursued aggressive sales strategies, and as KB Kookmin Bank slowed down, there was talk in the financial sector that the first and second places had switched," adding, "With CEO Jin focusing on strengthening internal stability rather than aggressive sales, the competition for leading banks centered on external growth and profit is expected to level up."

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