IT, metaverse, funeral, pet care among list of possible new business opportunities
By Yi Whan-woo
Banking companies will soon be desperately looking for the next growth engine in the non-financial sector under the government’s latest deregulation plan, leading to speculation about new ventures they may be interested in.
The plan, announced by the Financial Services Commission (FSC) on July 19, is a rule that prevents banks and industrial companies from entering each other’s industry as part of efforts to curb unfair business practices by conglomerates. The purpose is to alleviate.
According to Rule, industrial companies can own up to 4% in banks and non-financial companies can own up to 15% in the latter.
The FSC considers the rules obsolete, especially in an era of “great ambiguity” where barriers between companies are becoming increasingly ambiguous due to the rapidly evolving nature of digital technology.
In the newly announced proposal, banks see IT companies as a way to compete with leading technology companies that are using digital capabilities to expand their presence in the banking sector.
Kookmin Bank’s parent company,
KB Financial Group, the nation’s top lender, has gradually but sustainably nurtured start-ups in robotics, metaverse and other areas that may be needed to boost the digital banking environment.
Shinhan Financial Group, the parent company of Shinhan Bank, has invested in artificial intelligence (AI), prop tech and blockchain.
Prop Tech is a technology tool used in real estate to streamline the way people buy, sell, research, market and manage real estate.
Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets across your corporate network.
NongHyup Financial Group has launched a metaverse platform called Dokdo-Verse, with its lending division NH NongHyup Bank partnering with fintech Finger.
The platform is known for using non-fungible tokens (NFTs). It is a crypto asset on the blockchain, with unique identification codes and metadata that distinguishes them from each other.
Two other banking groups, Hana and Woori, are in talks with affiliates to enter the fintech business.
“If the rules that separate financial and industrial companies are relaxed, banks will actively enter the IT business,” a commercial bank official said on condition of anonymity, lenders moving to digital banking. He said what he was facing could not deal with high-tech companies.
Banks are also interested in cryptocurrencies and other virtual assets as demand from the banking sector grows.
Lenders, like major technology companies, are expected to leverage vast amounts of customer data to drive delivery and other services that can be delivered through the platform.
For example, Shinhan Bank has developed an on-demand grocery delivery app that provides financial benefits to self-employed customers in the restaurant business. He said he entered the on-demand grocery delivery business after concluding that he had an advantage over his larger rivals in terms of fees and other economic benefits.
In the long run, banks aim to use this app as a big data source for creating related financial products.
Woori Bank has launched a courier service in partnership with convenience store chain Seven-Eleven.
Hana Bank has developed a service that allows app users interested in new cars to compare car prices on the market.
KB Kookmin Bank has partnered with Yogiyo, a grocery delivery platform, to allow customers to order groceries from the bank’s app.
NH Nonghyup Bank has partnered with one of its clients, the Flower Farmers Association, to sell flowers through the app.
The FSC’s deregulation program has attracted the attention of other financial services companies, such as insurance companies and credit card companies, that use aggregated data to provide customized services to their customers. Services on the list include burial, pet grooming, and car lending.
“In particular, credit companies are considered competitive with the non-financial sector because they have data that helps them analyze their customers’ shopping behavior,” said a credit card company employee.
Meanwhile, some analysts speculate that deregulation could lead to unfair competition between banks and their smaller peers. “Some industries are dominated by small and medium-sized enterprises (SMEs) that do not have enough capital to compete with lenders,” said Ha Jun-kyung, a professor of economics at Hanyang University.
“In that case, banks will have an advantage in the uneven competition they strongly oppose.” Professor
mentions lenders’ demands for equal competition with major tech companies in the platform business.
Jung Sung-in, a professor of economics at Hongik University, said deregulation plans could be risky given that bank assets also include customer assets.
“In the future, potential risks from non-financial companies owned by creditors could spill over into banking operations, which means that such risks could endanger customers’ money,” Jung said. Said. “Therefore, the government needs to be careful in deciding the extent to which banks are allowed to invest in the non-financial sector.”
Credit/Source : KoreaTimes