Faith in Life, Faith in Death... NongHyup Bank Forms Dedicated Team for High-Risk Products

Establishment of 'Product Selection Committee'... From New Product Launch to Post-Management
Customer Profitability Added as Evaluation Item in Branch Key Performance Indicators

[Asia Economy Reporter Kangwook Cho] NH Nonghyup Bank is establishing a dedicated organization for high-risk products. It is also considering creating a new product development department separate from the sales and marketing departments. A new evaluation item called 'Customer Yield' has been added to the key performance indicators (KPI) of branches. The main goal of this reorganization is to protect customer assets and prevent incomplete sales. This reflects the strong directive from NH Nonghyup Bank President Byunghwan Son, who emphasized "putting customer trust as the highest value and taking the lead in protecting the rights and interests of financial consumers."

Expansion and Reorganization of the Self-Management Product Council... Promotion of Establishing a 'Product Selection Committee'

According to financial circles on the 28th, Nonghyup Bank is currently pushing forward the establishment of a tentative 'Product Selection Committee.' Previously, Nonghyup Bank operated the Marketing Council and the Asset Management Product Council. The Marketing Council deliberates and resolves basic policies related to marketing, shares current marketing issues or product launch statuses, while the Asset Management Product Council is responsible for deliberating and resolving basic policies regarding the launch and major operations of asset management products such as investment trusts, discretionary Individual Savings Accounts (ISA), bancassurance, and retirement pensions.

The newly established 'Product Selection Committee' is expected to be formed by expanding and reorganizing the existing Asset Management Product Council. This organization will take on roles including those previously handled by the Asset Management Product Council and will also be responsible for post-management of new product launches. Notably, unlike before when the head of marketing concurrently chaired both the Marketing Council and the Asset Management Product Council, the chairperson of the new organization will be the chief officer of the consumer protection division. This is in accordance with the draft of the 'Model Internal Control Standards for Non-Bank Products' prepared by the Financial Supervisory Service and the banking sector, which is expected to be finalized as early as next week.

Consideration of Establishing a 'Product Development Team (Department)' to Oversee Product Development

Additionally, Nonghyup Bank is reviewing the establishment of a Product Development Team or Department. In the case of the Product Development Team, a new Investment Products Team will be created to handle non-deposit products such as investment trusts, bancassurance, and retirement pensions. The Product Development Department, which will be formed separately from the Marketing Strategy Department, will take over the duties of the existing Marketing Strategy Department, Digital Marketing Department, and the All One Bank Center cell, integrating and overseeing product development tasks scattered across various departments. This aims to perform a neutral role independent of product sales and marketing.

New 'Customer Yield' Evaluation Item Added to KPI

Internal measures to prevent incomplete sales have also been strengthened. First, a 'Customer Yield' evaluation item has been added to the KPI. This means that even after selling a product, continuous customer management and monitoring of yields are required. Furthermore, a quarterly Incomplete Sales Prevention Working Council will be held to check for signs of incomplete sales, and the results must be reported to the Financial Consumer Protection Council and the Board of Directors. Monitoring items include financial product sales indicators, happy call status, mystery shopping results, and complaint occurrence status.

Earlier in April, to strengthen monitoring of incomplete sales, the scope of financial investment product happy calls was expanded. To address difficulties in confirming complete sales due to consumers mistaking happy calls for marketing calls and refusing to receive them, a 'Happy Call Pre-Notification Text Message' was implemented, and 'Online Happy Calls' were introduced. Dedicated counters for elderly investors were established at all branches, and the age criterion for elderly customers was lowered from 70 to 65 years old. To promote a culture of complete sales, an award system for 'Masters of Complete Sales' and 'Exemplary Offices in Complete Sales Management' was also established.

President Byunghwan Son: "Customer Trust as the Highest Value"... Orders to Protect Consumer Rights

President Son, who officially took office in March this year, stated, "Nonghyup Bank must be like an umbrella for our customers when it rains," urging that customer trust be prioritized above all else. Given the decline in consumer trust in the financial sector due to incidents such as the overseas interest rate-linked derivative-linked fund (DLF) scandal and the Lime Asset Management incident, he emphasized the need to take the lead in protecting the rights and interests of financial consumers. Following President Son's directive, Nonghyup Bank was among the first banks to initiate advance compensation related to Lime Asset Management funds and accepted sanctions regarding the so-called 'Original Equipment Manufacturer (OEM) style fund' sales without appealing, despite legal controversies.

An official from Nonghyup Bank said, "President Son emphasizes aiming for 'customer-centered, customer-oriented asset management' to restore consumer trust," adding, "Accordingly, we will provide services that thoroughly analyze profits from the consumer's perspective and conduct systematic risk management."

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