[Kim Hyung-joong's Fintech Talk] Hana Financial Group’s Fintech Strategy 2
[Kim Hyung-joong's Fintech Talk] Hana Financial Group’s Fintech Strategy 2
  • By Lee Hyun-jung (kotrapeople@koreaittimes.com)
  • 승인 2016.05.30 18:00
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Han Jun-seong, Chief Future Innovation Officer (CFIO)

Hana Financial Group’s CFIO Talks with Prof. Kim Hyoung-joong on Fintech

Han Jun-seong is an innovator. Hence his job title is CFIO (Chief Future Innovation Officer).

Han Financial Group Chairman Kim Jung-tae, a legendary self-made businessman in the Korean financial sector, was a good judge of character.
Han Jun-seong was working on the technical support team after graduating from Sunrin Internet High School. In 2006, Chairman Kim had Han transferred to Hana Financial Group, a financial holding company, and the two drew up a roadmap for new projects together.

Since then Han has spearheaded the launch of smart financial services, such as Hana Members (an open platform for membership services), e-wallet service Hana N Wallet and 1Q Bank (a mobile banking service platform), thereby climbing up the corporate ladder quickly. In January 2015, Han became the youngest executive vice president at Han Financial Group (HFG).

Top journals in the field of business, including The Financial Times, viewed Han as a ‘creative destroyer.’

Han Jun-seong, the HFG’s Chief Future Innovation Officer (CFIO)

During the one-hour-long interview, Han passionately talked about the HFG’s work and fintech, leveraging his extensive knowledge of the financial sector. He was so knowledgeable that it was difficult to swiftly transcribe his interview.

He ended his interview, describing the HFG’s roadmap for fintech as follows: “The HFG has named its service “1Q,” a term that Korean pool players use to describe scoring dozens of points in a single turn.


Kim Hyoung-joong: I am curious about how the HFG has been addressing issues related to the so-called digital borders. There are regulations on cross-border money transfers.

Han: Let me explain it on a superficial level. Courier companies know everything in detail from how to make cross-border delivery of goods and specific weight and size limits for the packages to things that cannot be delivered, like narcotics and liquids.

Banks have acquired knowledge about how to transfer cross-border money transfers in a professional manner over the past several decades or hundreds of years. We know how to do business with countries, be it the US or the Philippines. When our knowledge about that was incomplete, Bitcoin was developed to save us from wading through all the regulatory tangles.

Bitcoin is a peer-to-peer international money transfer service that relies on the “block chain,” a public ledger of all Bitcoin transactions.

We’ve recently launched a new service called 1Q Transfer. For example, say your nephew is in the US. Even if you don’t know his bank account number, you can send money to him as long as you know his mobile phone number. Once you have sent money, you nephew will be notified via text message.

We have sought to strike a partnership with overseas markets like Indonesia and Canada. We’ve already launched 1Q Transfer in the Philippines and Australia.


Rather than randomly investing in fintech firms, we should give priority to building a value chain though the creation of a fintech ecosystem.

Kim: Given the Korean fintech ecosystem, picking one or two promising fintech firms and investin in them could be an option.

Han: Investing in them is a good idea. Strictly speaking, we need fintech firms that can stand on their own. Unfortunately, there are few Korean fintech firms that hold globally competitive technologies.

On the other hand, American fintech firms are large in size and are operating in a different environment. A case in point is mobile financial service provider Movenbank. Simple, which had only 300,000 customers, were sold for $184 million.

The US’s cultural and regulatory environments are different from ours. In the US, the job of opening accounts can be contracted out to gateway service providers.

Thus, there are contractors dedicated to the job in the US and they have been doing the job for long. However, that’s a no-no in South Korea. They are called banks in the US. When we take a closer look at businesses that are called banks in the US, we notice that they are not banks. They are more of fintech firms.

Maintaining diversity in fintech is important. Bank’s investment in fintech firms will not always make a huge difference. This is because the market already has a plethora of funds available.

Thus, what’s important is to build a fintech-friendly environment powered by a value chain..

 

Han Jun-seong, Chief Future Innovation Officer (CFIO) at HFG(second from right )won the top prize for developing innovative financial products at The Banker


Moving beyond the boundaries of existing financial products….

The HFG’s product innovativeness has been recognized by one of the world’s most influential financial newspapers.

 

Kim: I think your take on the situation is very accurate.  

Han: Other countries are not paying attention to the Korean fintech environment. However, they are showing an interest in products developed by the HFG.

In June 2012, Hana Bank won the top prize for disruptive financial product development at The Banker's Innovation in Banking Technology Awards. ‘Destruction products’ we developed thinking outside the box earned us the award. The Banker is a monthly international financial affairs publication owned by The Financial Times. Innovativeness in Hana Bank’s products was globally acknowledged. In 2013, Hana Bank received a global banking innovation award from the Bank Administration Institute (BAI), which is a non-profit organization focused on improving banking standards.

Kim: It means that the HFG launched financial products that are as innovative as AlphaGo a long time ago. And you played a leading role in Hana Bank taking home such accolades. Given that the HFG won the awards a long time ago, HFG is an innovator, indeed.

 

We shouldn’t try to become a jack-of-all-trades.

There is a long way to go when it comes to fintech. We shouldn’t sprint to the finish line.

 

Kim: When KT was on a roll in the telecom industry, Dacom emerged, taking the Korean Internet industry to new heights. When SK Telecom emerged as a mobile carrier, telecom giant KT did not see SK Telecom as its rival. Now, SKT beats KT in sales. Judging from that, the emergence of fintech will serve as the driving force behind growth of banks.

Han: We are wrong about one thing. When the media reported that the UK’s Barclays launched biometric readers and the US’s Citibank launched a new mileage system, Korean banks felt anxious.

Not to be outdone by foreign rivals, Korean financial companies try to be good at everything. They are working on mobile phone-based money transfer services like M-Pesa and developing new mileage services.

However, if you go after so many things at the same time, you will end up feeling fatigued and consequently cannot muster up the strength you badly need when you seriously set about something important. Fintech is a marathon. Korean companies need to maintain your optimal marathon pace not to get exhausted too early.

Kim: This interview was a great opportunity for me to learn about both technical and industrial issues. Thank you very much.


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