KB Group rethinks pension management
The announcement came as retirement pensions - regardless of provider - suffered low returns in the 1 percent range despite increasing demand as Korea rapidly ages.
KB, the country’s second largest finance unit, said that it has established two new units under its wealth management division tasked with furthering synergy across KB affiliates with an aim of advancing the returns of its retirement pension lineup.
The key affiliates include KB Kookmin Bank, KB Securities and KB Insurance.
The banking unit upgraded the status of its retirement pension business division and reorganized the structure to separate production development and marketing.
KB Securities and KB Insurance set up a new division designed to collaborate on retirement pensions across all KB units.
The financial group mentioned that the focus on the pension sector is in line with KB Chairman Yoon Jong-kyoo’s business direction.
A source at KB Financial Group also underlined rising demand as a factor behind the change.
“It is expected that demand for retirement pension funds will increasingly grow with the aging demographic and the change in population structure,” said a source at the group.
On the bank’s side, retirement pension clients are considered lucrative since they tend to stay as long-term subscribers with fairly large fund commitments.
The group also vowed to use advanced technology, like artificial intelligence (AI), to enhance returns.
Observers have blamed static management for the lower returns because financial institutions rarely recommend changes to their products even if they continue to log lower returns.
“The counselling center will be in charge of developing a more active counselling system,” the source said.
KB plans to use AI and big data to launch an automated recommendation system.
KB will also introduce more retirement pension products via their online and mobile channels.
BY PARK EUN-JEE [firstname.lastname@example.org]