Shinhan outlines its future business strategy

Han Dong-woo, chairman of Shinhan Financial Group, discusses business strategy during an event celebrating the group’s 15th anniversary on Thursday at its headquarters in central Seoul. [SHINHAN FINANCIAL GROUP]

Shinhan Financial Group, the nation’s largest financial services company by net profit, will reorient its business focus toward digital services, global expansion and more proactive risk management, the group’s chairman said during a ceremony marking the company’s 15th anniversary on Thursday.

The announcement comes as the financial industry sees increasing challenges from tech companies entering the sector and lower commission fees on brokerage services and card transactions.

Shinhan Financial Group’s chairman highlighted the importance of adopting the latest technology such as iris scanning to remain competitive.

“Digitalization in the financial sector has become something of the general trend that we cannot resist,” Han Dong-woo said during the ceremony at the group’s headquarters in central Seoul.

“Money transfers using iris scanning and fingerprint verification as well as investment services built on artificial intelligence are becoming more commonplace.”

During the announcement, Han also vowed to expand Shinhan’s global presence with a localized approach.

“We should win over customers overseas by increasing our competitiveness based on the understanding of local markets,” he said.

The vast majority of Shinhan’s current revenue comes from home, with overseas revenue accounting for less than 10 percent. In the short term, the group hopes to expand to neighboring countries in Asia such as Indonesia and Vietnam.

On the group’s management of investment portfolios, Han called for a more “dynamic risk management culture.”

“In terms of asset management, we need to broaden the range of investment portfolios,,” he said, “avoiding inherent risk-averse tendencies.”

Despite unfavorable economic conditions, Shinhan has managed to see profit growth this year.

The group’s net profit stood at 28.8 billion won ($25 million) in the second quarter, a 32.2 percent increase from the previous quarter thanks to an improvement in the net interest margin.

Shinhan Financial Group also announced a 13.3 percent year-on-year increase in first-half operating profit this year, recording 1.45 trillion won.

Last year, the group’s net profit totaled approximately 2.372 trillion won, ranking first in the industry for an eighth consecutive year.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]