Son Tae-seung, Chairman of Woori Financial Group, "Leaping Higher in Crisis with Resilience"

Financial Holding Companies' Management Strategies for This Year (4) Woori Financial Group
Presenting 6 Major Management Strategies
"Expanding Non-Banking Sector Portfolio"
Goal of Becoming the 'Number One Financial Group'
"Digital as the Primary Customer Touchpoint"

Son Tae-seung, Chairman of Woori Financial Group

[Asia Economy Reporter Kim Hyojin] Resilience. This concept, often used in physics and ecology to mean 'elasticity' or 'recovery resilience,' has emerged as the management keyword for Woori Financial Group in 2021.

It is a concept emphasized by Sohn Tae-seung, Chairman of Woori Financial Group, with the meaning of overcoming the unprecedented crisis caused by the all-out economic crisis and accumulated insolvency due to the novel coronavirus infection (COVID-19) and soaring even higher.

According to the financial sector on the 7th, Chairman Sohn said in a message to employees for the New Year, "Resilience has recently become an essential capability required of companies." Just as a spring compressed by external shocks bounces back stronger with vigorous energy, his idea is that only innovative companies that can swiftly grasp rapidly changing external trends, filter out risks, and discover new opportunities can leap forward even more significantly.

Until last year, Chairman Sohn focused on encouraging innovation based on the concept of 'Netflixhada' (to Netflix). It means creating new value through a digital transformation like Netflix, which has become an icon of 'disruptive innovation.' His emphasis on resilience at the start of the new year is interpreted as a reflection of the heightened sense of crisis due to the prolonged COVID-19 pandemic.

The management strategies he proposed to overcome the crisis are summarized into six points: ▲expanding the group's growth base ▲leaping to 'Digital Number One' ▲enhancing management efficiency ▲strengthening brand and 'Environmental, Social, and Governance (ESG)' management ▲reinforcing risk management and internal control ▲leading global business.

Woori Financial Group is evaluated as having a somewhat weak business portfolio compared to competing groups. Additionally, due to the market contraction caused by COVID-19, large-scale mergers and acquisitions (M&A) in the short term are considered difficult. He revealed the plan to "continuously strengthen the growth engine by exploring portfolio expansion in various ways for the non-bank sectors, which are still vacant within the group."

Regarding the rapid digitalization of the financial industry, Chairman Sohn said, "In the past, the financial industry was called the 'Inji (人紙) industry,' meaning it was possible with just people and paper," adding, "But now, the financial industry is more aptly described as the 'Indi (人Di) industry,' an advanced industry where everything is done with people and digital technology."

This year, with the full-scale implementation of digital-based innovative financial businesses such as personal credit information management (MyData), platform competition among existing financial companies like Woori Financial, big tech (large information and communication companies), and fintech (financial technology) companies is expected to intensify further.

Chairman Sohn emphasized, "Now, digital platforms are the primary customer touchpoints for financial companies," and added, "We must innovate platforms through company-wide digital transformation utilizing innovative technologies such as artificial intelligence (AI) and big data, and become the digital number one financial group."

He also stated, "In overseas markets, it is necessary to implement innovative strategies that expand channels by localizing operations based on digital technology while improving profitability," and predicted, "This year will be an important turning point to become a leading financial company in key Southeast Asian countries such as Vietnam."

Challenges in Enhancing Management Efficiency

Another challenge Woori Financial Group must solve is its excessively high Cost-to-Income Ratio (CIR) compared to advanced financial companies and other domestic financial groups. CIR is an indicator of a bank's management efficiency, representing the proportion of expenses such as personnel costs in operating profit. A higher CIR means greater management inefficiency.

As of the third quarter of last year, Woori Financial Group's CIR was 52.5%, the highest among major financial groups. Chairman Sohn said, "In times of severe uncertainty in the management environment like now, it is important not only to earn well but also to maximize cost efficiency." Woori Financial plans to soon prepare comprehensive improvement measures to optimize human and material resources within the group according to the management environment.

Along with this, Chairman Sohn envisions leading the creation of social and environmental value in finance and actively contributing to building a sustainable society in line with the government's '2050 Carbon Neutrality' and 'Korean New Deal' policies. Accordingly, Woori Financial has strengthened the role of the holding company's control tower and established an ESG Management Department to manage ESG operations and branding at the group level.

Regarding the Financial Consumer Protection Act, which will be enforced in March, Chairman Sohn stated, "Consumer protection and internal control are essential prerequisites for business," and urged, "All group companies must have a perfect internal control system."

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