Six out of 10 financial firms in S. Korea turn digital: FSS survey

2019.05.14 14:50:51

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More than half of financial companies in South Korea go digital this year as more Koreans opt to get things done online, data showed Tuesday.

According to a survey conducted by Financial Supervisory Service on 108 financial companies including 17 banks, 8 card firms, 41 insurance firms, and 42 brokerages, 65.7 percent, or 71 companies, are engaged in digital transformation. Digital transformation in a business environment refers to a company integrating digital and physical elements according to changes such as of customers and outside environment and creating new business models and products and services and applying them to management.

The survey showed that the 71 financial companies plan to carry out a total 164 digital transformation projects this year and invest 584.48 billion won ($492.4 million) in total, which is about 8.23 billion won per financial firm on average. Banks plan to spend 23.56 billion on average on boosting digital services with all 17 banks actively engaged in 48 digitalization projects. Card firms have allocated an average 5.26 billion won, insurance firms 3.21 billion won, and securities firms 2.81 billion won.

By business content, 38 of 164 projects dedicated to introducing and expanding artificial intelligence (AI) service, 37 to automating internal business process such as through robotic process automation, and 26 to establishing and advancing big data platform.

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The survey also showed that 58.3 percent, or 63 financial firms, already have an independent unit for carrying out digital services and projects, with an average 56.4 workforce. Of them, 33.3 percent, or 36 companies, designated executive-level officials as head of digital unit.

Overall, banks and card companies were more actively involved in setting up an independent organization responsible for digital works with larger scale than insurance and securities firms. A total 105.5 employees were working on digital services and products at banks and 107 employees at card firms while 20.9 employees at insurance firms and 34.7 employees at brokerages. In particular, the country’s top four commercial banks had an average 194.5 employees working on digital transformation, with 59.3 percent or 64 firms having plans to additionally secure digital experts.

The FSS, meanwhile, said that digital transformation could bring risks to security, management, and internal control system, and advised financial companies to be engaged in responsible innovation efforts. The financial authority will enhance monitoring and protection on financial consumers, it said.

By Lee Sae-ha and Lee Eun-joo

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