Digital Banking Encouraged For South Korean Banks To Provide Faster, More Convenient Service

A financial services expert highlighted how important it is for the banking industry to keep itself abreast with contemporary technological advancements, The Korea Times reported Sunday.

According to Choi Jung Kiu, AT Kearney's Asia Pacific Financial Institution Practices head, banks in South Korea should be modifying their business models and upgrading their platforms to offer more convenient, faster and simpler banking transactions to its customers.

The Korea Herald reported that some South Korean banks have been forced to close down their branches because of the increasing demand for digitalized banking systems. The Bank of Korea announced that internet banking services have largely set an increase to 142 percent over the last five years. Similarly, mobile banking services accelerated to 1,600 percent in the same period.

Korea Institute of Finance financial researcheer Seo Byung Ho said, "Banks are downsizing as more customers are using mobile and other online forms of banking services."

Choi also discussed how several banks in China and other advanced countries were already rapidly shifting their banking systems to "mobile and online" while South Korean banks are taking it at a snail's pace.

"Almost all functions of a bank can now be replaced by financial technology (FinTech) and tomorrow's  bank model is already in the making," Choi said. 

According to Choi, South Korean banks should put into primary consideration the system of "end-to-end digitization" to improve the country's existing businesses. Further, he impressed that it is imperative for banks to improve customer interfacing, and that they should be able to provide sales support, digital solutions and data analytics to frontline sales managers.

"Banks' existing incremental approach toward building a digital solution will not work anymore," Choi added. "The key to value creation at speed and scale is a fundamental relook at the principles and business model of banking."

Choi Jung Kiu was the former global head of strategy and retail banking at the Standard Chartered Bank in China.