[Asia Exclusive] "Fierce Challenges from Big Tech Companies... Direct Breakthrough through Expertise and Face-to-Face Channels"

Heo In, KB Kookmin Bank CEO's Contrarian Digital Transformation
Strengths Including Customer Trust and Asset Management Expertise
Service Differentiation Based on Financial Expertise
Deployment of Field Experts at Regional Hub Branches
Seamless Integration of Face-to-Face and Non-Face-to-Face Channels
'The K Project' Utilizing AI and Big Data
Future-Oriented System Completed with IT Infrastructure Build
'MyData' Leading to Customer-Centric Finance
Partnerships with ICT-Based Companies like Kakao
Two-Track Strategy for Southeast Asia and Advanced Market Expansion

[Asia Economy Reporter Kangwook Cho] "The financial sector offensive by 'big tech' companies like Naver and Kakao will only intensify. KB Kookmin Bank has strengths such as asset management know-how and customer trust that secure competitive advantages, so we are not afraid of their attacks. We plan to compete with differentiated 'customer-centric digital services.'"

When asked if he felt a sense of crisis regarding big tech advancing into the financial territory armed with massive platforms, KB Kookmin Bank President Heo In showed no hesitation. Like the saying "heroes emerge in troubled times," he was confident that KB could properly showcase its strengths through a differentiated 'digital innovation' strategy. Throughout the interview, he emphasized 'innovative change through Digital KB.'

President Heo stated, "Big tech companies will fully enter the financial industry based on the customer base secured through their platforms and large-scale non-financial data and customer information," adding, "Although tough competition will unfold, Kookmin Bank will respond by focusing on competitive advantage areas such as integrated asset management and consultation capabilities based on financial expertise."

He proposed a counterintuitive strategy of actively utilizing face-to-face channels. He explained that the face-to-face channel, a strength that differentiates from new competitors, will evolve into a 'high value-added specialized consultation center.' For example, President Heo described the 'PG 2.0' channel strategy. This involves 6 to 7 branches forming a Partnership Group (PG) to collaborate among stores within the group, addressing diverse financial needs of customers. It features regional hub branches combining bank, securities, PB centers, and pension centers, with specialized experts concentrated in each field according to regional financial needs such as high-net-worth asset management and corporate loan consultations. Following the opening of the Nowon Comprehensive Financial Center in Seoul and the Bujeon-dong Comprehensive Financial Center in Busan on the 15th, additional centers in Busan and Gwangju will open by the end of this month, with plans to expand regional hub branches further in the second half of the year.

Regarding the biggest difference between internet-only banks like KakaoBank and traditional banks like KB Kookmin Bank, President Heo explained, "Internet-only banks' mobile innovations directly lead to better customer experiences, but traditional bank customers use both face-to-face and non-face-to-face channels, so customer experiences in each channel must be simultaneously and drastically improved to truly impress customers."

This idea led to the concept of 'seamless linkage' between face-to-face and non-face-to-face channels. In other words, President Heo envisions providing customers with uninterrupted service of the same quality regardless of which channel they use.

He said, "Call centers will evolve into AI contact centers where simple consultations are handled by chatbots and callbots, allowing consultation staff to focus on specialized financial consultations and face-to-face to non-face-to-face linked services," adding, "By October, when 'The K Project' is fully established, system implementation will be complete."

'The K Project,' which has been piloted at some branches since February, is a next-generation IT system ambitiously prepared by President Heo. He introduced it as "an innovation project preparing a better future for KB and a core tool for change and innovation for successful digital transformation." The plan is to build an innovative IT infrastructure applying the latest technologies such as artificial intelligence, big data, and cloud, while advancing marketing processes and systems as a future-oriented IT system.

He expressed confidence, saying, "Once the system is fully operational, the entire system including marketing hub, non-face-to-face channels, global platforms, and IT infrastructure advancement will be completed."

President Heo sees that although competition will intensify with the emergence of new competitors, collaboration is also possible. He envisions partnering with ICT-based big tech companies like Kakao and Naver Financial to develop high-quality data-based products and jointly enter global markets beyond the narrow domestic market.

He said, "We will cooperate with fintech companies to enhance the competitiveness of the bank's application and analyze data from a non-financial perspective," adding, "Our goal is to provide differentiated products and services." He further noted, "At the same time, we are open to the possibility of cooperating with big tech companies to create high-quality data-based partnership products and jointly enter global markets."

Since his inauguration in 2017, President Heo has set and pursued the strategic direction of a 'dynamic and innovative digital KB centered on customers and employees.' The MVNO service 'Liiv M,' launched in November last year as the first in the banking sector, is one of President Heo's proud achievements combining KB Kookmin Bank's financial services and digital innovation. Expanding biometric authentication, strengthening non-face-to-face platforms, and robo-advisor-based asset management services are in the same vein.

MyData, which collects and manages personal information in one place to provide customized services, is another focus area for him. In particular, President Heo is envisioning finance that approaches customers before they seek it. The plan is to build an integrated system that allows customers to conveniently solve problems in a one-stop manner without having to search themselves. Additionally, by combining internal customer data with external data, he aims to overcome the business limitations confined to bank-only data and expand business integration across other sectors. The goal is to transform fragmented supplier-centered services into customer-centered integrated financial and non-financial asset management systems. Due to these pioneering efforts, he was the only bank president invited to the recent 'MyData Forum' hosted by the Financial Services Commission.

President Heo said, "KB Kookmin Bank has shown an active stance on MyData by opening APIs to fintech companies even before the MyData Act was passed," adding, "The merging of existing digital strategic assets such as KB ChaChaCha (used car) and real estate prices with MyData to develop new financial services seems to have been highly evaluated."

He identified global business as a new growth engine. This is a solution to overcome the growth limits of the domestic financial market and secure continuous growth and future value creation momentum. In particular, for overseas business expansion, he has established a two-track strategy targeting Southeast Asia and advanced markets. In high-growth Southeast Asia, the focus will be on retail operations, while in stable advanced financial markets, the plan is to secure a profit base centered on capital market business.

President Heo said, "Following the acquisition of Cambodia's Prasac, we received preliminary approval in April to establish a local corporation in Myanmar," adding, "Discussions are also underway for additional share acquisition of Indonesia's Bukopin Bank, which will accelerate the completion of the Southeast Asian financial belt connecting Myanmar, Cambodia, and Indonesia."

Interview conducted by Asia Economy Financial Chief Reporter Cho Hee Lee, summarized by Asia Economy Reporter Kangwook Cho jomarok@

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