National Policy Banks Also Accelerate 'Digital Transformation'

Mercury, Kieum, and San-eun Compete to Accelerate 'Digital Transformation'
Promoting Organizational Restructuring, Digital System Development, and Fintech Business Agreements

(From left) Korea Eximbank in Yeouido, Seoul; IBK Industrial Bank of Korea in Euljiro, Seoul; KDB Industrial Bank headquarters in Yeouido, Seoul.

The buzzword in the financial sector this year is undoubtedly ‘digital transformation.’ Last year, during the COVID-19 crisis, the policy banks that played a crucial role as a bulwark for the Korean economy have now set digital transformation as a key goal for the second half of the year, driven by a sense of urgency that it can no longer be postponed. The digital transformation of policy banks, which mainly handle policy and corporate finance, is analyzed as a proactive strategy to prepare for the ‘post-COVID’ era.

According to the financial sector on the 12th, the management keyword for the second half of the year for the three policy banks?KDB Industrial Bank, Korea Eximbank, and IBK Industrial Bank?is digital transformation. These banks, which had focused all efforts last year to prevent mass corporate bankruptcies amid the COVID-19 crisis, have recently begun shifting their management focus to digital transformation, which they had set as a goal.

The most proactive is Korea Eximbank. President Visit Kyoo is personally leading the effort to make this year the inaugural year of the genuine ‘Digital Eximbank.’ To this end, it will begin building a data-driven automated screening system within the second half of the year, the first among policy financial institutions. Additionally, to secure data competitiveness, it is pushing forward with the goal of completing a data center at the Talent Development Institute in Yongin, Gyeonggi Province, in 2024. The data center is one of President Visit’s key projects and will serve as Korea Eximbank’s digital infrastructure for more than 30 years.

IBK Industrial Bank is also promoting the expansion of its digital ecosystem centered on President Yoon Jong-won. The Digital Innovation Committee, chaired directly by President Yoon, is at the core of IBK’s digital transformation. The committee was launched earlier this year to inject digital DNA into the bank and is driving changes across all areas, including customer engagement, business processes and service development, human capabilities, and organizational culture.

IBK’s efforts to expand its digital ecosystem are active in two main areas: digital transformation of core banking fields such as corporate screening and customer consultation, and partnerships with big tech and fintech companies. It is also concurrently working on training 1,000 digital core talents by 2023.

KDB Industrial Bank’s digital transformation efforts began as early as 2019. This was thanks to Chairman Lee Dong-geol’s swift decision to move away from the traditional restructuring-focused business framework toward future innovative growth. To promote a bank-wide digital strategy, the IT headquarters was renamed the IDT headquarters, and organizational restructuring of the digital promotion department within the headquarters was also carried out.

Furthermore, it is promoting the digitalization of corporate finance operations overall and has signed a business agreement for joint development and sales of financial and non-financial products and services with Viva Republica, the operator of Toss.

Digital Transformation of Policy Banks: Not a Choice but a Necessity... "Likely to Accelerate in the Second Half"

Due to the nature of project finance-centered operations, digitalization has been slower and more challenging for policy banks compared to general commercial banks. However, their efforts toward digital transformation are regarded as an inevitable trend of the times. Especially with the post-COVID era approaching, all three banks are reported to have high internal expectations in terms of meeting the non-face-to-face demand from corporate clients and others in finance.

An official from a policy bank said, "There is naturally great interest not only because of customer demand for non-face-to-face services but also due to the significant effects of reducing manpower and costs internally. We expect that digital transformation, which has been postponed, will gain real momentum starting from the second half of this year as the COVID-19 response winds down."

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