Finance and the 4th industrial revolutionRecently, I met with Mr. N at Japan’s Ministry of Economy, Trade and Industry, and Mr. Y, director of research at Japan’s International Finance Center. I could see how actively the Japanese government was preparing for the fourth industrial revolution. A general policy organization has been installed under the Prime Minister’s office to pursue a “selection and concentration” strategy.
The fourth industrial revolution is a key axis in economy for the Korean government as well. What’s important is which policies are used.
Considering the size of the economy and nature of the fourth industrial revolution, the “me too” strategy that Korea employed in the past would be limited.
Instead, I believe that efficient and selective investment using limited resources and concentration strategy are needed like Japan.
Industries with global competitiveness should be left to the market, but the government should preemptively engage in industries that need to enhance competitiveness through restructuring with a two-track strategy.
The financial industry cannot be an exception for the fourth industrial revolution. Nevertheless, it is hard to expect existing financial giants to lead the changes.
Their management practice adheres to established interests, and the financial industry is traditionally conservative.
Therefore, we need new policy and perspectives on the financial market. Personally, I would like to call for a two-track strategy of maintaining the framework of financial policy to keep the existing financial orders while adding new grounds and rules for competitions. Control and autonomous policies should be flexibly employed.
Environment for small financial companies specializing in specific technical areas to actively operate needs to be prepared. Deregulation is necessary to encourage active business of fin-tech companies. They should be encouraged to lead the changes for overall financial industry by stimulating large financial firms accustomed to established interests and practices.
I propose considering designation of financial companies in charge of supporting fourth industrial revolution.
How about designating a certain state-run financial company and concentrating government funding to support systematic and focused fourth industrial revolution?
*Former president of Shinhan Bank.