Financial chairmen set sights on stabilizing business after turbulent 2014

It was clear from the New Year’s messages delivered by the nation’s top financial groups that many are reorganizing this year in order to survive. The key word used by the financial group chairmen in their speeches was “innovation,” indicating that the industry as a whole believes that without radical change, each companies’ business and profits will be threatened by the unfavorable economy.

Last year was particularly harsh as many of the financial groups continued to deal with mounting scandals that began haunting the industry in 2013.

In January last year, the industry was mired in controversy after it suffering the biggest-ever leak of customers’ private information. Top executives at major credit card companies including KB Card, Lotte Card and NH Card were forced to resign.

The situation did not improve much, particularly for KB Financial Group, at which the management became locked in a feud that tarnished the banking group’s reputation and resulted in the resignation of its chairman and bank president as well as several outside directors.

This year, conditions are not expected to be better. The domestic market continues to struggle, while banks’ profitability has shrunk on the back of the record-low interest rate.

Faced with the difficult circumstances, several leading banking groups including KB Financial Group, have vowed to push aggressively for innovation and changes.

Shinhan Financial Group

The first thing that Han Dong-woo, the group’s chairman, mentioned in his New Year’s speech was that the company would keep its guard up as regulatory and technological changes take a toll the overall financial market.

“Thanks to the hard work of our employees, Shinhan Financial Group was able to secure a satisfactory performance [last year],” Han said. Shinhan was one of the few groups that enjoyed steady growth without any internal or external controversies.

“However we have to look at ourselves objectively,” the chairman added. “At a time when the management environment is changing so rapidly, the winner and loser can switch places instantly if we let our guard down.

“We shouldn’t settle for or be conceited about the small achievements that we have made.”

KB Financial Group

The financial group’s Chairman Yoon Jong-kyoo said the time of preparation has ended and that it is now time for the company to aggressively execute its grand plans.

“During my inauguration [in late November] I mentioned three things: regaining the trust of our customers, pursuing management that is centered on sales and securing growth engines.

“The plan was to find a turning point that would help our group recover our [tarnished] reputation.

“The time of preparation has ended and it is time for us to execute and put into practice all of the directions that we have set for ourselves.

He admitted that KB Financial Group wasn’t able to bring about changes last year, but not because it lacked strategy or vision.

“We lacked the courage to execute it,” Yoon said. “It is time for us to put it words into action and not fear failure.”

Hana Financial Group

Chairman Kim Jung-tai stressed the company will maximize synergy through an early merger with Korea Exchange Bank.

“The merger is just one of the processes in maximizing synergy,” Kim said. “The more important task is expanding our true ability through collaboration and convergence.

“Customers’ needs are no longer simple like they were in the past. We can only open the hearts of our customers when we provide services that go beyond our industry’s borders and create products that are combined with other industries.”

He also stressed in his message that change and innovation doesn’t come from elaborate strategies.

“The important thing is that even the smallest change doesn’t come out of the blue,” Kim said. “Only those who push their work without fear and without giving up in the middle can move mountains, and moving mountains starts with people moving the smallest stones.

“Innovation starts from acting on it.”

BY LEE HO-JEONG [ojlee82@joongang.co.kr]