Shinhan Financial Group Chairman Han Dong-woo said that he will steer the group towards a greater focus on financial technology, or fintech, and global expansion this year.
Chairman Han revealed the plan after his financial group unveiled a net profit of 2.4 trillion won ($2.06 billion) in 2015, the highest of its kind in the domestic financial industry. The company has surpassed the 2 trillion won mark in profits for two consecutive years.
To further strengthen Shinhan’s competitiveness, the chairman said he would enhance digital financing and increase its global footing.
Early this year, the group underwent restructuring and established a digital finance team. Additionally, the group, including all Shinhan affiliates, held a meeting with 16 Korean fintech companies to discuss the future of Shinhan’s digital financing last week.
Recognizing the importance of global expansion over three decades ago, Shinhan currently has 151 spokes in its global network of 19 countries. However, with the sluggish domestic financial market, Shinhan is aiming to target the larger financial market abroad, in particular in Asia, this year, according to group officials.
Early in March, Shinhan acquired preliminary permission for a banking license from the Central Bank of Myanmar, the first for a Korean financial group.
Shinhan Financial Group Chairman Han Dong-woo proclaimed keywords for this year so that the bank can extend its lead in the industry.
In a statement, the group said that Han chose "digital finance" and "global" as keywords to help the company consolidate its top position, proven by its 2015 net profit of 2.37 trillion won — the highest in Korean financial industry for the eighth straight year, and the second year in a row that its net profit surpassed 2 trillion won.
The group underwent a restructuring early this year in order to separate and bolster its digital finance team. According to the group, the nine-man digital strategy team will serve as a control tower for the group's related businesses, as well as conducting research.
All the group's affiliates, including its flagship Shinhan Bank, joined together on March 7 to cooperate with 16 Korean fintech companies.
The group said another key phrase in Shinhan's 2016 strategy is "going global," which the group sees as absolutely necessary because the domestic economy is mired in low growth with low interest rates. "The group's future hinges on expanding its business worldwide," it said in a statement.
The group has been entering the global market for about three decades and it now has 151 branches and incorporated and unincorporated offices in 19 countries.
Beginning this year, the group will concentrate its efforts to build in regions with growth potential, especially in Asia. To accomplish this, Shinhan said it would diversify its ways of market entrance to raise profitability, upgrade its operations systems and improve its acclimatization to local environments.
In March, Shinhan Bank won preliminary permission for a banking license from the Central Bank of Myanmar, the first time for a Korean bank. The group said the bank can begin operating in early 2017.
"Progress cannot be achieved through a one-off effort. It is an outcome of aggregated changes," said Han. "Shinhan should continue to work on how to deal with the new world brought about by advances in information and communication technology."
Shinhan's mission is "making a better world through the power of finance."
“To realize this mission, we are committed to the goal of increasing customer value by way of offering the products and services that are best-suited to the changing needs of the changing times,” the chairman said. “Today, our society is entering a new age where social transformations are led by the digital forces. These changes indicate that our success formula from the past may not be valid any more.”
Friendly customer interactions by counter staffs no longer have as much merit to those who have stopped visiting physical branches.
Likewise, a credit card brand is no longer the driver of choice to those who carry credit cards on their smart phones.
“Now, our task is to provide products and services that are relevant in this digital age through creative innovations and to bring benefits to the world in so doing,” Chairman Han said.
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