New Year Keywords Revealed Through the Reorganization of the Four Major Banks (Comprehensive)

Emphasis on Organizational Slimming, Digital Transformation, Consumer Protection Enhancement, and ESG Management

[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 (large information and communication companies). Additionally, a common feature is the substantial 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 ▲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 that were previously separated by function such as digital, IT, and data were completely reorganized into platform organizations where planning, development, and operation can proceed simultaneously from the customer's perspective. 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, Liiv Mobile Platform Division, Future Contact Center Promotion Division, Institutional Sales Promotion Division, and Cloud Platform Division, were given the suffix 'Division (Dan)' and department heads at the headquarters level were appointed to greatly 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. Managing Director Kim Hye-ju, who was recruited by Shinhan Bank, was appointed as Chief Big Data Officer (CBO) overseeing 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 has been strengthened to ensure thorough financial consumer protection.

Hana Bank Establishes Banking Industry’s First Consumer Risk Management Group
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 ▲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 reflects the intention to implement full-scale 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' with the Real Estate Finance Division placed under it, and the Corporate Group and SME Group were merged into the 'Corporate Group' with the Foreign Exchange Business Division 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 enhance 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 president 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 Division (CSSO), and Woori Financial Group streamlined its current '7 divisions - 2 teams - 5 general managements' system to '8 divisions - 2 teams' while 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.