Cultural change in the banking industry looms, with financial technology penetrating into the industry worldwide.
But the new technology should be embellished with “human touch,” which would leverage deeper fintech penetration by improving customers’ satisfaction, bank officials said at a forum held at Standard Chartered Korea headquarters in Seoul on Wednesday.
Michael Gorriz, chief information officer of the London-based international banking group, said in a keynote speech that banks would have to “enhance technology with the human element.”
Calling the advent of digitization in the financial industry “the cure for banking,” as Gorriz said in front of some 250 participants from financial circles at home and abroad, the banks should find fintech vital to meet expectations of bank customers.
Michael Gorriz, chief information officer of Standard Chartered Bank, speaks at a fintech forum at Standard Chartered Korea in Seoul on Wednesday. (Standard Chartered Korea)
“The traditional relationship between manager and client is replaced by a lot of digitization,” he said. “And the trust that has been based on the personal relationship is now superseded and enhanced by another kind of trust ... (or) a series of fulfilled expectations.”
Speaking of the trust, he elaborated to say the technology-led banking service should fulfill the need of some interventions or consulting by a human.
“That’s where the human comes in again.” he said.
International banking giants like Standard Chartered should also nurture their ability to be “agile and responsive” to meet customers’ needs, said Shameek Kundu, group chief data officer of Standard Chartered.
Kundu said giant banks, which he referred to as “elephants,” may take advantage of investment capabilities and geographic diversity that gives access to funding and talents worldwide.
Partnership with technology firms is also direly needed for banks to tackle such demand for technological advancement, where “human touch” would eventually improve banking service.
“Technology companies, big and small, are absolutely critical,” he said. “(They will allow) us to do what we really want to do, which is to serve our customers in the way they want us to serve them.”
When asked about the fintech penetration outlook in South Korea, CIO Gorriz said the fourth-largest economy in Asia has already arrived at a “good starting point for innovation.”
He cited an “established digital ecosystem,” a large population with a large portion of it being tech-savvy and not shy of using the technology and the capacity to “crank out technology specialists.”
Lim Jung-wook, managing director of Startup Alliance Korea, said fintech startups in Korea have been gaining prominence since late 2014, citing data by consulting firm ROA Invention LAB that investment into fintech firms skyrocketed from 8.4 billion won ($7.46 million) in 2014 to 96.4 billion in 2016, and to 294.5 billion won in the period of January to April this year.
Lim, who also delivered a keynote speech at the forum, added the growth of fintech firms in Korea is causing the phenomenon of “unbundling” of traditional banks, or fintech startups taking part in local commercial banks’ online-banking functions.
To leverage further growth of the startup-driven fintech industry, however, he stressed the need for deregulation to prevent offshore venture capitals from bypassing fintech startups in South Korea.
“Easing regulations may signify that startup market confidence strengthens,” he said. “Some venture capital firms turn away from Korea startups, saying tough regulations mean the business is not clean.”
He added deregulation for better penetration of fintech is critical, especially in terms of the growth of commercial banks.
“The time is ripe for financial regulators to strike the balance between customer protection and innovation, to pave the way for fintech penetration,” Lim said.
By Son Ji-hyoung (firstname.lastname@example.org