[Financial Digital New Normal] Fubyunjeupsa... Financial Leaders' 'Digital Lifeline'

Acceleration of Big Tech's Challenge in Finance
Operation of Chairman-Direct Digital Task Force

[Asia Economy Reporter Kangwook Cho] "Digital transformation is the future of groups whose survival is at stake." This is a common statement among the heads of major domestic financial holding companies who are committed to digital innovation.

The shock of the novel coronavirus disease (COVID-19), which has struck the world, did not spare large domestic financial holding companies either. As untact finance has become full-fledged and big tech companies such as Naver and Kakao accelerate their entry into the financial industry, these companies have reached a point where they must change immediately or worry about survival. This is the background behind why the chairmen of major financial holding companies have been directly leading the digital transformation efforts across their entire groups, advocating for 'digital innovation.'

According to the financial sector on the 2nd, the five major financial holding companies?Shinhan, KB Kookmin, Hana, Woori, and NH Nonghyup?are carrying out organizational restructuring, including establishing and operating dedicated departments directly under the chairman to accelerate digital innovation.

Shin Yong-byeong, Chairman of Shinhan Financial Group, recently created a 'Loonshot Organization' directly under the chairman to build a new digital platform and has begun full-scale operations. This organization consists of a total of 30 members, including a head of the task force at the executive level and working-level staff. Digital platform innovation is a core task that Chairman Shin is pursuing with his life on the line, and the Loonshot Organization will lead this effort. Shinhan Financial aims to achieve differentiation that surpasses the limitations of existing financial platforms. ▶Related articles on pages 6 and 17

Yoon Jong-kyu, Chairman of KB Financial Group, cited globalization and digitalization as the key keywords for his third-term management vision. Chairman Yoon proposed providing 'comprehensive financial services' to secure a competitive edge in the digital sector. The strategy is to strengthen the platform sector and simultaneously enhance customer convenience by utilizing offline branches. This is to secure future digital finance leadership through comprehensive digital transformation across sales, processes, infrastructure, and other areas.

Kim Jung-tae, Chairman of Hana Financial Group, is pursuing the goal of discovering new businesses through digital financial innovation and nurturing digital talents among all employees. To this end, Chairman Kim has built a digital customized education platform called DT University and is also focusing on industry-academia cooperation. In particular, to secure digital talents, they have agreed to collaborate with academia not only on joint research for developing digital financial products and services but also on exchanging technical capabilities and practical experience, introducing innovation programs for talent development, and supporting and investing in science and technology startups.

Son Tae-seung, Chairman of Woori Financial Group, established a second office at Woori Financial Namsan Tower, where key personnel for digital business are located. This is to personally oversee the digital innovation process and strengthen communication with the working-level staff. Chairman Son moves to the digital office every afternoon to check the progress of digital projects and expressed his determination to lead changes faster than the market. To expand digital synergy at the group level, they are also promoting the relocation of the holding company and the digital division of their IT subsidiary, Woori FIS, to the Woori Financial Digital Tower, where the bank’s digital personnel work.

Kim Kwang-soo, Chairman of NH Nonghyup Financial Group, declared the management slogan "A New Decade! Design Nonghyup Financial!" and presented digital management innovation as the top priority issue. Chairman Kim personally oversees the DT (Digital Transformation) Promotion Supreme Council and has introduced a DT index that quantifies the progress of each subsidiary and task, which is also reflected in the performance evaluation of subsidiary CEOs.

One of the reasons why the 'chairmen' are directly involved is that the offensive of big tech and fintech companies armed with 4th industrial revolution technologies is shaking the positions traditionally held by banks and other conventional financial institutions to their core. With the government's 'fintech promotion policy' backing the full-scale entry of big tech into the financial industry, this has become a matter directly linked to survival.

A financial sector official said, "There is a widespread sense of crisis that the financial sector must not fall behind due to various risks expected from COVID-19, such as deteriorating soundness, as well as the spread of untact services and the growth of big tech," adding, "This is why financial groups are staking their survival on digital."

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