[2021 National Audit] IBK Bank Leads in 'Kkeokgi', Driven by High-Scoring Cross-Selling KPIs

Assemblyman Yudongsoo Calls for Institutional Improvements and Self-Help Measures to Ensure National Policy Banks Fulfill Their Original Missions

[Asia Economy Reporter Park Sun-mi] Behind IBK Industrial Bank of Korea's record-high profits even amid the COVID-19 situation was the expanded influence of cross-selling in its Key Performance Indicators (KPI).

According to data received by National Assembly Financial Services Committee member Yoo Dong-su from IBK Industrial Bank of Korea on the 14th, the weight of cross-selling in IBK’s KPI rose from 30 points in 2017 to 55 points last year, nearly doubling in three years.

IBK’s KPIs consist of ▲profitability and soundness ▲growth ▲customer management ▲employee and internal control. The total score is 1000 points each year, but the points allocated to each category vary annually depending on the bank’s priorities for that year.

In 2017, the customer management category was allocated a total of 95 points, with 50 points for individual customer management and 45 points for corporate customer management. Within this, cross-selling was allocated only 15 points each for both individual and corporate customers. In the following year, 2018, the points for individual cross-selling increased from 15 to 20 points, meaning that sales branches received more credit for selling products such as cards, insurance, and funds to individual customers. Corporate customer management remained at 15 points, the same as the previous year.

The proportion of points for cross-selling continued to grow over time. In 2019, the points for individual customer cross-selling increased by 5 points to 25 points within one year. In 2020, it was further increased by 10 points to 35 points. Compared to 2017, this was a 20-point increase in three years. The KPI points for cross-selling to corporate customers remained at 15 points until 2019 but were raised to 20 points last year.

Assemblyman Yoo Dong-su stated, “IBK’s headquarters KPI is the cause behind the continuously criticized so-called ‘kkeokgi’ (sales practice of bundling deposits, cards, insurance, funds, etc. as loan conditions). The headquarters’ annual increase in KPI points for cross-selling encourages frontline ‘kkeokgi’ sales.”

Yoo added, “IBK, which recorded the highest number of suspected ‘kkeokgi’ cases and amounts, must be questioned on how it aligns with the national policy bank’s founding purpose of promoting autonomous economic activities and improving the economic status of small and medium enterprises. We will also scrutinize the ‘hope-breaking’ acts of bundling sales targeting youth and small business owners during the COVID era.” He emphasized, “We will push for regulatory improvements by financial authorities, including expanded supervisory regulations to prevent ‘new types of kkeokgi,’ and urge national and commercial banks to establish self-regulatory measures to prevent kkeokgi.”

Meanwhile, IBK’s cumulative consolidated net profit for the first half of this year reached 1.2143 trillion won, a 47.9% increase compared to the same period last year.

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