From Banking to Commercial Area Analysis... Consulting Boom for SMEs and Small Business Owners in the Banking Sector

KB Kookmin Bank Supports Small Business Owners at 'KB Soho Consulting Center'
Shinhan Bank Provides Commercial Area Analysis Consulting for Seoul Self-Employed

[Asia Economy Reporter Sunmi Park] Kim Ju-young (alias), who runs a hanok lodging business in Jongno-gu, Seoul, sought SOHO consulting operated by KB Kookmin Bank after experiencing a sales hit due to COVID-19. He was advised to change his customer base from foreigners to domestic customers and received support for building a system to expose business addresses and information on portal sites as well as linking reservation systems. Since then, he has recorded the highest sales ever.

Vacant stores have been steadily increasing in major commercial districts due to the prolonged COVID-19 pandemic. Myeongdong, Seoul's representative commercial area, is severely affected, with 4 out of 10 stores empty. According to the "2021 Q1 Commercial Real Estate Lease Trend Survey" released by the Korea Real Estate Board, the vacancy rate of medium to large stores in Myeongdong was recorded at 38.4%. Rental inquiries, temporary closure, and business termination signs are posted on Myeongdong shops. Photo by Moon Honam munonam@

The banking sector is actively supporting small and medium-sized enterprises (SMEs) and small business owners who are struggling due to COVID-19 through various consulting and education programs. While pursuing ESG (Environmental, Social, and Governance) management by supporting COVID-19 affected groups, they are also opening opportunities to expand their customer base amid a tight household loan market.

According to the financial sector on the 18th, the ‘KB SOHO Consulting Center’ of KB Kookmin Bank has conducted 2,112 consulting cases this year targeting self-employed individuals affected by COVID-19. They provide management consulting in various fields such as location and commercial district analysis, marketing and promotion, financing, taxation, and legal matters.

Moon Jin-gi, a specialist at the KB SOHO Consulting Center, said, "Previously, the focus was on startup support consulting, but after the spread of COVID-19, we have shifted to operating as a crisis management support system for small business owners." He added, "We provide not only financial counseling but also customized consulting reflecting the difficulties of individual businesses and social network service (SNS) consulting to help develop non-face-to-face sales channels."

Earlier in November last year, KB Kookmin Bank fully revamped KB Bridge, which recommends customized policy funds based on artificial intelligence (AI) for small business owners, and this month launched an open banking service for individual business owners. In February, they also expanded and renewed the lineup of financial products exclusively for SMEs (including individual business owners).

Shinhan Bank recently provided commercial district analysis consulting for self-employed individuals in Seoul who are struggling due to COVID-19. Based on Shinhan Card’s big data of over 300 million transactions per month, the consulting covered topics useful for business operations such as ▲ changes in commercial districts before and after COVID-19 ▲ changes in sales and number of stores in major Seoul commercial districts over the past 10 years.

Banking Sector’s SME and Small Business Support Achieves Dual Benefits

Woori Bank previously provided customized comprehensive consulting including cost reduction, sales recovery, and financing support to SMEs and small business owners who are under loan principal maturity extension and interest payment deferral.

The banking sector approaches support for SMEs and small business owners not as a profit-based business but as a customer service. However, in a situation where household loans cannot be actively expanded due to strengthened regulations, various support services targeting these groups are linked to customer base and profit expansion, thus achieving dual benefits.

In fact, SME loans (including SOHO) from the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?recorded 516.9 trillion won at the end of last month. This is an increase of more than 6.5 trillion won compared to 510.3 trillion won in March, marking the largest monthly increase since May last year.

A banking official explained, "It is true that SMEs and small business owners have emerged as major customer groups for commercial banks in the COVID-19 era," adding, "Support for them leads to various effects such as practicing ESG management, blocking financial risks due to management deterioration, and expanding the customer base through linked financial product usage."

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