IT companies are creating a digital ecosystem... Banks are actively responding

[Choice Economy Reporter Kim Seulgi] "China's Alibaba and Tencent, the U.S.-based Google, Korea's Naver and Daum Kakao are now working to build a digital ecosystem. The world where digital controls the entire society, including economy and culture, is just around the corner."

Park Sang-soon, CEO of DBK Partners, who previously led Boston Consulting's Korean financial part, introduced the changes that the digital environment will make to the financial market at the 2015 Financial Seminar (sponsored by KB Financial Group, Shinhan Bank) held at the Youth Training Center in Eulji-ro, Seoul on the 26th and stressed to college students, "It is time to prepare for the new environment for the future."

CEO Park Sang-soon said, "FinTech, a combination of financial and technology, has become a hot topic in recent years because digital has a huge impact on the financial market. Digital has created an environment where customers can collect information they need anytime, anywhere and reflect their demands on their products. In addition, huge amounts of recorded data are creating new value-added services. This digital environment is also bringing about changes in the financial market."

"Banks' concerns began as fewer customers visited their stores for financial transactions. Due to competition and employment problems within the industry, the number of branches cannot be reduced, but profits are continuously decreasing. The banking industry's gross return on assets (ROA) is one-third of what it was eight years ago. In addition, as IT companies have recently entered the fintech sector, there are concerns about customer churn. This is why banks are seeking fintech through various channels recently"

"The fintech revolution will take place under the leadership of start-up groups, IT companies, and traditional financial institutions," he says. "In the case of start-ups, you can get great help in raising capital through fintech. P2P landing and cloud funding are representative. IT companies such as Alibaba, Tencent in China, Naver in Korea, and Daum Kakao are no longer just creating business channels. Within the digital world they built, they are making the services they provide part of their customers' lives. It is the same trend to provide financial services following chat, games, and taxis," he explained.

"In the case of existing financial institutions such as banks, fintech is a matter of survival. However, since it is difficult to create contact points with new customers compared to IT companies, we are using technology development through startup support centers or partnerships with some companies," he added.

"The era of Internet banking will begin in earnest once applications for preliminary approval are made by October. Internet banking will be an oligopoly just like Internet businesses. Only a few companies will survive the fierce competition."

Regarding the outlook for regulations on Internet banks, he explained, "Existing banks have been subject to very conservative regulations, and Internet banks are also expected to be subject to regulations at the level that banks receive, with only a degree of difference. However, conservative regulations in the field of innovation should be supplemented. A typical move is to ease restrictions on corporate ownership of banks."

CEO Park Sang-soon said, "It is important for university students who have all the possibilities open up to strengthen their ability to contribute to the digital field. In addition, there is a limit to what you can achieve alone, so you need to respect your partner and try to combine your strengths through various experiences. You are the 'digital native' who grew up in the digital environment, so you are highly adaptable to new changes. Have a dream and jump into the rapidly changing digital environment."

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