Banking Sector New Year Keywords: Digital, Consumer Protection... Efficiency Also Up Through Organizational Streamlining

New Year Keywords Explored Through the Organizational Restructuring of the Four Major Banks

[Asia Economy Reporter Park Sun-mi] The key themes of personnel and organizational restructuring at major commercial banks at the end of this year are streamlining and digitalization of organizations. These measures are interpreted as efforts to significantly enhance decision-making speed and execution capability in preparation for the challenging profitability in 2021 due to the low-growth, low-interest rate environment and competition with big tech companies. Additionally, a common feature is the significant strengthening of consumer protection amid the increased need for accountability following a series of private equity fund incidents this year.

According to the banking sector on the 30th, KB Kookmin Bank focused its organizational restructuring on laying the foundation for a major transformation into a financial platform company. The main features of this restructuring are ▲establishment of platform organizations ▲strengthening customer marketing ▲and rapid execution capability. To accelerate digital innovation, 25 platform organizations where business (Biz) and technology (Tech) teams work together were newly established within 8 business groups.

KB Kookmin Bank Lays Foundation for Major Transformation into Financial Platform Company
Shinhan Bank Enhances Internal Decision-Making Speed by Reducing Executive Position Levels

The organizations, previously separated by functions such as digital, IT, and data, were completely reorganized into platform organizations based on customer perspectives, enabling planning, development, and operation to proceed simultaneously. Additionally, the headquarters marketing organization was strengthened to expand the core customer base and support branch performance. The decision-making lines of headquarters departments were streamlined under a 'responsible management system' that strengthens responsibility and authority to secure practical business competitiveness. Core business division names leading KB Kookmin Bank’s future growth, such as MyData Platform Division, Personal Marketing Division, Live Mobile Platform Division, Future Contact Center Promotion Division, Institutional Sales Promotion Division, and Cloud Platform Division, were designated as 'Dan' (division), and department heads at the headquarters level were appointed to significantly enhance decision-making speed and execution capability.

Shinhan Bank reduced the executive position levels to promote responsible management and horizontal communication. The previous three-tier executive position system of Senior Vice President - Deputy Senior Vice President - Managing Director was reduced to two tiers: Senior Vice President - Managing Director. This institutional arrangement allows senior vice presidents to practice responsible management for each group. Furthermore, horizontal communication among executives was activated to increase internal decision-making speed and strengthen execution capability in business promotion.

The bank also receives full support from Shinhan Financial Group for digitalization and consumer protection. To gain an advantage in data competition such as MyData, a big data division was newly established within the group. Kim Hye-ju, a managing director recruited by Shinhan Bank, was appointed as Chief Big Data Officer (CBO), concurrently serving both the holding company and the bank, responsible for establishing big data strategies and discovering joint business opportunities. By building a platform for continuous sharing with compliance support and audit departments on key management issues of subsidiaries within Shinhan Financial, including the bank, pre- and post-monitoring was strengthened to ensure thorough financial consumer protection.

Hana Bank Establishes First Consumer Risk Management Group in Banking Sector
Woori Bank Enhances Efficiency through Organizational Integration and Streamlining

Hana Bank’s key points in this organizational restructuring are ▲strengthening financial consumer protection functions through the establishment of a Consumer Risk Management Group ▲establishment of an ESG Planning Section dedicated to strengthening Environmental, Social, and Governance (ESG) management ▲and a team-centered organizational system based on the 3S principles (Simple, Speed, Smart).

Notably, the establishment of the Consumer Risk Management Group is the first in the industry. The existing Risk Management Group focused on managing the bank’s risks to maintain asset soundness and secure appropriate returns relative to risks. This new group reflects the intention to implement full-fledged consumer risk management, focusing on constructing an optimal asset portfolio considering customers’ asset size, risk preference, and returns.

Woori Bank significantly streamlined its organization by reducing three business groups and cutting the number of executives. The Personal Group and Institutional Group were integrated into the 'Personal & Institutional Group,' under which the Real Estate Finance Division was placed. The Corporate Group and SME Group were merged into the 'Corporate Group,' with the Foreign Exchange Business Division placed under it. The HR Group and Business Support Group were also integrated into a newly established 'Management Support Group' to enhance organizational efficiency. Despite the integration and streamlining, the establishment of the 'Sales & Digital Group' to increase the linkage between digital innovation and sales and strengthen both face-to-face and non-face-to-face sales capabilities is a noteworthy aspect.

Meanwhile, the four major financial holding companies also proceeded with organizational restructuring aimed at improving overall group efficiency and speed while strengthening ESG management. KB Financial Group recently established a vice-chairman position to lead the insurance and global business sectors, which have expanded within the group through recent mergers and acquisitions (M&A). Shinhan Financial Group established an ESG Planning Team under the Strategy & Sustainability Office (CSSO), and Woori Financial Group streamlined its current '7 divisions - 2 teams - 5 general managements' system to '8 divisions - 2 teams,' while also strengthening the holding company’s control tower role for group-wide ESG management and brand management.

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