[Disrupted Finance] Artificial intelligence to APIs, KB digitizes bank

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[Disrupted Finance] Artificial intelligence to APIs, KB digitizes bank


Han Dong-whan, KB’s head of digital business, discusses the bank’s strategy. [KB KOOKMIN BANK]

KB Kookmin has the largest customer base among Korean banks with more than 30 million clients. This has resulted in its digital strategy being more customer-centric, according to Han Dong-hwan, head of the digital business group at the bank.

The bank’s digitalization efforts can not only be found online but also at physical branches.

Funds have already been committed for the digital transformation. Last year, KB Kookmin Bank announced it will spend 2 trillion won ($1.76 billion) on digitizing its workflow and retail services over the next seven years.

The bank plans to train 4,000 digital experts to help it achieve its digitalization

Korea JoongAng Daily sat down with Han to discuss in more detail KB’s digital strategy and future vision.

Q. What is the major characteristic of KB’s digital strategy that sets it apart from that of its competitors?

. Our digital strategy is geared towards customer convenience. Take for example the Liiv TalkTalk, an artificial-intelligence powered banking app. The platform can not only handle financial services but also features an instant messaging function, much like KakaoTalk. But the chatting function is designed to make sending money more convenient. The app lets users directly send and receive money with friends in their mobile contact lists. The messaging, however, comes with strengthened security comparable to that of Telegram.

KB also plans to integrate more functions into the TalkTalk assistant. Our focus is to expand the range of financial products sold by the assistant. With a series of upgrades, it can now recommend and sell loan products and funds.

KB appears to have taken the lead in digitalizing physical branches. What is KB seeking to achieve?

The launch of a digitally-focused branch in Gimpo, Gyeonggi, is aimed at better serving clients who want decent advice for investment or savings products as well as for loan products. When people see a line, both the staff and the customer feel pressured.

Once we transfer many of the simple tasks to machines, the teller counter can be less packed with people, and those seeking one-to-one advice can have quality time.

We don’t think all branches should be like this. When opening such branches, we need to find a location where demand for loans and financial products is sufficient.

There is a series of technologies that could define financial innovation, including AI, big data, blockchain and Internet of Things. Is there any specific technology that will drive KB’s digital strategy?

Big data will play a critical role. To run artificial intelligence, we need a great deal of data. This is why KB formed a separate department for data management. But the use of data is tricky in Korea because it is affected by regulation. The regulation for data used for research has been eased, but [regulation] for data used for marketing or sales remains hefty.

I believe the authorities need a more balanced view.

The Financial Services Commission announced that application programming interfaces (API) will be made more open in the banking sector so all players will be able to access the payment systems without having to sign service contracts with each bank they want to do business with. What kind of impact will the move have on KB’s digital drive?

Toss grew in popularity because the app acts as a bank of banks. If the open API system is launched, the system will work much like Toss, and the banks will face tougher competition.

If a user signs up for the platform, they can get access to all kinds of financial products regardless of what bank they register with. So, we need to carve out our own niche to win the competition.

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