[Desk Column] The Old Annual Address of Financial Company CEOs

Annual Repeated New Year's Message from Financial CEOs: 'Digital Innovation'
Amid Pursuit by Platform Financial Companies, Change and Innovation, Digital Transformation Are Directly Linked to Financial Firms' Survival
Hoping to Hear Self-Praising New Year's Messages in the Digital Sector Next Year

Lee Chohee, Head of Distribution Department

[Asia Economy Lee Cho-hee, Head of Finance Department] To gauge what occupies the minds of top executives (CEOs) in the business and financial sectors at the beginning of the year, one should look at their New Year's addresses. Through these speeches, one can vaguely grasp the year's key topics, as well as the CEOs' concerns and plans.

In January 2020, the key phrase in the New Year's addresses of major financial sector CEOs was "strengthening transparency." Many CEOs expressed reflection following the Derivative Linked Fund (DLF) incident. Each emphasized regaining the trust of customers, which had fallen, by mentioning trust, responsibility, and similar values. Another key phrase was "digital." In an era where customers and markets change rapidly overnight, there was a palpable urgency not to fall behind in digital innovation and transformation (Digital Transformation, DT).

Did the determined resolutions of the CEOs hold up? Looking at this year's New Year's addresses, the 2021 key themes from the speeches of the chairpersons of the four major private financial holding companies?KB Kookmin, Shinhan, Hana, and Woori?can be summarized as "platform" and "innovation." Amid the COVID-19 pandemic, non-face-to-face interactions became a major operating principle of our society over the past year. The growth speed of platform-based financial companies like KakaoBank and K Bank, which allow account opening without visiting a bank branch, was remarkable.

The so-called "branch network" has now become a burden for financial companies. The number of deficit branches that only consume costs has increased significantly. However, reducing them freely is difficult due to public opinion. This is because of issues such as elderly customers unfamiliar with non-face-to-face transactions and workforce restructuring. For these reasons, financial authorities and financial labor unions oppose branch consolidation and closures. On the other hand, platform financial companies operating with just one application (app) are running swiftly like lean track athletes, even supported by the government.

The challenges posed by platform financial companies did not start just one or two years ago. The reason financial CEOs repeatedly called for digital innovation last year was to respond to this situation. Ultimately, this year's New Year's addresses from financial sector leaders also reflect a self-questioning that they have not achieved significant results in the "digital farming" over the past year.

What about the New Year's addresses from the year before last? In January 2019, the word "digital" also appeared without fail in the New Year's addresses of the major financial holding company chairpersons. All four major financial holding company chairpersons, who were continuing their terms, unanimously pledged to put their lives on the line to strengthen digital capabilities.

New Year's addresses are filled with sincere reflections on the past year and requests for the new year. The repeated messages about digital transformation and innovation over several years can also be seen as containing reflections and criticisms that it is difficult and that results have not been achieved.

Finance is conservative and burdened with many regulations. Because of this, change is not easy. However, new financial services born from the changes of the Fourth Industrial Revolution are light and fast. Dinosaurs were too big and slow to respond to the increasingly cold climate change. What replaced them were rodents born with warm fur. It is hoped that next year's New Year's addresses from financial sector leaders will not just repeat promises of digital innovation but celebrate excellent achievements over the year.

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