 |
Shinhan Financial Group is setting a new paradigm for digital transformation by realigning its business structure to achieve its goal of becoming a “digital finance company.”
The top-tier financial holding firm is building a digital portfolio for all of its affiliates to become digitally agile, so that the new slogan ends up with becoming a cliche chanted by most financial firms in the post-coronavirus era.
To differentiate its digital strategy from those of its rivals, the company created a new division called “LoonShot” in October directly controlled by Chairman Cho Yong-byoung. The new unit consists of 30 officials, and places its focus on mapping out Shinhan’s next-generation digital platform strategies.
“The unit is focused on creating and finding new content that can attract more traffic to our online and mobile platforms from a financial and non-financial viewpoint,” a company official said. “We are going to generate a stronger network by enhancing the openness of our platforms in order to unite customers, the platforms and new business partners.”
Shinhan is considered one of the nation’s leading digital financial firms, and to prove its dedication to its digital transformation, the firm started announcing operating revenue generated from its digital platforms. This is the first time that a local financial group has announced its digital-only revenue.
According to the group, Shinhan’s digital platforms reaped an operating revenue of 342.6 billion won in the third quarter.
Shinhan recognizes the importance of emerging technologies for its timely digital transformation.
The company identifies four areas ― such as artificial intelligence (AI), big data, blockchain and cloud computing ― as crucial stepping stones for its digital leap forward, and is investing in the sectors to develop new digital technologies for use in its financial platforms.
In September last year, the company established a new tech-driven subsidiary called Shinhan AI. It was unprecedented for a financial company to create an AI-driven affiliate.
Shinhan AI’s two investment products, launched early this year, have chalked up 66.9 billion won in sales by winning a favorable market response with a stable output this year despite the COVID-19-induced volatility in the local financial market, according to Shinhan.
The AI affiliate also recently completed development of what it calls a “Market Warning System” to predict possible risk factors in the market and take preemptive measures before making investments. The system is expected to get more and more sophisticated and help Shinhan affiliates enhance their risk management capabilities, the company said.
Shinhan AI is also teaming up with Element AI, a renowned AI firm based in Canada, to continue to advance its AI platforms and co-launch new services.
Shinhan Card, the credit card arm of the group, is on track to build an AI-driven customer service center by taking advantage of voice assistant platforms. The company also launched a facial recognition payment system, Shinhan Face Pay, using the emerging technology.
For data leadership, Shinhan Bank and Shinhan Card ― two of the biggest data-consuming and data-producing arms of Shinhan ― are actively taking part in data transactions at the Financial Data Exchange that the Financial Security Institute launched in May.
Shinhan Bank and Shinhan Card joined hands with the authority and participated in the launch of the exchange from the early preparation phase. The two firms offered massive datasets that they have piled up for the exchange’s vitalization.
“Shinhan Bank took advantage of 300 million transaction datasets from its 25 million customers, and provided data on revenues, spending and financial assets by regions, for the exchange,” the official said. Shinhan Card is planning to sell datasets to overseas financial organizations for the first time in history here.
Shinhan is also putting immense effort into its security-driven authentication services. In August 2016, the company launched an authentication service for gold bar transactions by using a blockchain technology.
For cloud computing, the company is on track to build a more sophisticated cloud infrastructure to enhance the efficiency of work processes at its major affiliates.
“To create meaningful outcomes in all the aforementioned technologies, we will continue to enhance the expertise of the Shinhan Digital Innovation Institute, and support it as the group’s representative digital R&D center,” the Shinhan official said.
Shinhan Financial Group is also accelerating its efforts to scout more talented tech experts.
On Dec. 1, Shinhan Bank created a digital innovation unit under the direct control of CEO Jin Ok-dong. The unit will consist of four sub-organizations focusing on AI and data management.
The bank hired two vice president-level executives to ensure the tighter management of the unit’s data business. One of the new hires is Kim Hye-ju who is considered the nation’s first-generation data scientist. She worked for major tech companies ― such as Samsung Electronics, SK Telecom and KT ― before joining Shinhan.
Shinhan Bank also scouted Kim Joon-hwan whose expertise lies in creating business models by incorporating big data and AI to be the unit’s other vice president.
“We are going to continue scouting and hiring more IT experts to vitalize our digital transformation,” an official from the lender said.
The bank hired about 100 new employees and executives this year alone, as part of its efforts to brace for the financial new normal represented by the rise of non-face-to-face transactions and digital banking.
To create a more objective standard over the performance of its affiliates’ digital competitiveness, Shinhan Financial Group is in a six-month pilot period to decide whether to introduce what is called the digital literacy test. Under the move, the group will evaluate the digital literacy of its subsidiaries and test how agile they are in terms of embracing digital strategies.