Solving Digital Transformation Challenges... Joint Operation of Finance and Distribution

Banks Partner with Convenience Stores and Retail Industry
"Developing Lifestyle-Oriented Services and Attracting MZ Generation"

[Asia Economy Reporter Park Sun-mi] The finance and retail industries, which have grown primarily offline, are facing the common challenge of ‘digital transformation’ and are forming strategic alliances. There is high expectation that lifestyle-oriented financial services combining finance and retail will be effective in attracting the MZ generation, who are familiar with the digital era.

According to the financial sector on the 25th, active business partnerships with retail companies are taking place across the industry, centered on banks. Shinhan Bank plans to open a future-oriented financial branch combined with convenience stores as a testbed in October. Initially, one branch will be operated as a test, and if the response is positive, the target will be expanded in the future. As a future-oriented financial branch, an artificial intelligence (AI) bank clerk will provide financial services at the convenience store.

To this end, Shinhan Bank signed a business agreement with GS Retail in May to promote innovative financial services through the fusion of online and offline channels. The joint projects include ▲building future-oriented innovative branches through the fusion of online and offline channels ▲establishing processes to provide specialized financial products and services through convenience stores ▲developing electronic financial services specialized for the MZ generation.

Hana Bank has partnered with Lotte Shopping. On the 19th, Hana Bank signed a business agreement with Lotte Shopping to jointly promote digital business, planning to collaborate on financial live commerce, big data-based joint marketing, affiliated products, and online payment services. Hana Bank plans to develop lifestyle financial services based on big data through the combination of finance and retail. To activate the lifestyle financial platform, they decided to collaborate with the retail industry, which has extensive customers and sales channels.

Last month, they also signed a business agreement with Meatbox, a direct livestock product trading platform. They plan to carry out various cooperative projects such as financial services to support platform purchase payments, platform-exclusive cards for discounted livestock product purchases, and free insurance to prepare for various risks including COVID-19.

Synergy from Extensive Data Integration of Retail Companies

KB Kookmin Bank signed a business agreement with GS Retail in July to expand digital transformation combining finance and retail, including fintech introduction, and also achieved the launch of GS Pay this month. Through the agreement, both parties will jointly promote ▲expansion of fintech business through GS Pay development ▲joint promotions and marketing cooperation ▲creation of big data synergy through data collaboration.

Woori Bank signed a digital financial innovation business agreement with Lotte Members at the end of last year and a win-win finance and new business partnership agreement with Seven Eleven, and is currently carrying out joint projects. They are developing products by expanding the target of win-win loans, which were provided at low interest rates, to prospective convenience store owners wishing to start a business, and are actively developing customized supply chain finance products combining the bank’s corporate finance know-how and the retail company’s extensive data.

NH Nonghyup Bank is actively utilizing the Nonghyup distribution network to provide differentiated customer value on its lifestyle financial platform. Through a partnership with Nonghyup Economic Holdings, they opened ‘Nonghyup LYVLY,’ a specialized online shopping mall for domestic livestock products, available on the bank’s application (app) All One Bank.

Oh Sang-yeop, a research fellow at KB Financial Management Research Institute, stated that the financial industry can derive strategic implications from the digital transformation experience of the retail industry, which shares many similarities as a traditional offline industry. He advised, “Since the core of digital transformation is improving customer convenience using digital technology, the financial sector needs to build a digital environment where customers can easily and conveniently use financial services. At the same time, it must prepare for intensified competition due to the entry of internet banks such as Kakao Bank and K Bank, as well as non-financial industries like Naver, Coupang, and Starbucks into the financial sector.”

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