New chairman to put group in gear for competition with KB, Woori
Han Dong-woo, nominated to head Shinhan Financial Group, faces the daunting challenge of restoring the group’s reputation and mending in-house frictions.
The former vice chairman of the group’s insurance unit was tapped as the next chairman of the nation’s third-largest financial group Monday.
Shinhan has suffered a management crisis due to allegations surrounding its top three executives, who eventually resigned in the fourth quarter of 2010.
The group’s chairman, president and bank CEO quit in turn for alleged irregularities ― in an unprecedented case in the local market.
Former president Shin Sang-hoon and former bank CEO Lee Baek-soon have been indicted by the prosecution, while former chairman Ra Eung-chan was reprimanded by financial regulators.
Dismissing worries over the possibility of government intervention in management, Shinhan Financial successfully picked Han for the top post, who has been serving the group for 28 years.
Han stressed the urgency of solidarity in his remarks right after being selected as single candidate. “Our brand image was damaged and there have been conflicts within the structure,” he said.
The issue is how Han ― after he takes office in March ― can resolve the remaining feud between supporters of Ra and Shin.
Han has been regarded as one of the close confidants of Ra, while a large portion of Shinhan staffers had reportedly been skeptical about Ra’s management and personnel policies.
Conflicts could be settled or reactivated depending upon his coming appointments of key executive-level posts.
Shinhan also should brace for the situation under which financial services companies are placed in keen competition amid saturation of the local banking market.
The situation requires new financial skills and products, differentiated from those of competitors.
Furthermore, major competitors ― KB Financial Group and Woori Financial Group ― have already actively signed strategic alliances with foreign banks.
While Shinhan Bank, the group’s flagship unit, has recently recognized the importance of offering foreigner-friendly banking to raise its global brand value, Han’s role is drawing attention.
It provides Internet banking in nine languages to better serve non-Korean clients.
The Shinhan GLO-NET Service will be offered in traditional Chinese, simplified Chinese, English, Japanese, Vietnamese, Thai, Mongolian, Indonesian and Filipino.
It marks Korea’s first Internet banking available in this number of languages, although several lenders are operating online services in English and Japanese and run call centers in various languages.
The bank estimated that the nine languages were used by about 85 percent, or 1.02 million, out of the 1.2 million foreign citizens in Korea.
“With the service, migrant workers will enjoy the deduction or exemption of fees charged on cash transfer to other banks’ accounts,” a bank spokesman said. “Customers will also be benefited from preferential foreign exchange rates.”
The bank, which is seeking to obtain trademark and patent rights of the service, plans to broaden the scope of financial services for foreigners in a bid to lay the groundwork to become a global retailer.
Shinhan Bank also added Mongolian and Vietnamese services to its foreign language call center service.
With the addition of the two languages, its “Global Call Center (1577-8380)” offers services in five languages. Last year the bank introduced related services in English, Chinese and Japanese.
That was also the first time that native Mongolian and Vietnamese speakers have been trained as consultants to offer such services in Korea, according to the bank.
Amid the trend of removing barriers among units such as banking, securities and insurance, Han’s career as former vice chairman of Shinhan Life Insurance could be a merit to the group’s future development of comprehensive financial products.
By Kim Yon-se (firstname.lastname@example.org)