Chairman Shin dreams appearance of another Samsung Electronics in Korea’s financial market
In his interview with Maekyung Newspaper, FSC Chairman Shin Je-yoon introduced his plan to establish future vision for Korea’s financial industry. During his recent trip to Hong Kong and Australia, Chairman Shin discussed and shared various ideas regarding the financial vision with experts and representatives of financial authorities. The FSC plans to report a master plan for the financial vision to the president at the end of October.
MK(Maekyung Newspaper): What is the background of developing the financial vision?
Shin(Chairman Shin Je-yoon): Korea’s financial industry is on the crossroads of decline and another leap forward. Our financial institutions are being evaluated as helpless and hopeless. But I am more than confident that our financial industry can take another big jump if we take useful advantage of the challenges ahead.
MK: What is the main direction of the vision?
Shin: The vision must be able to support the realization of ‘Creative Economy’, contribute in developing new financial needs of aged population era, and help achieve shared growth with emerging economies in Asia.
MK: What did you see and learn in Hong Kong and Australia?
Shin: I once again learnt that global standards are absolutely important when it comes to financial law, regulations, and practices. In particular, we have to eliminate regulations and supervisory measures those are being implemented without clear or rational reasons after the financial crisis of the past. Moreover, it is necessary to improve transparency and predictability of financial supervision.
MK: Do you see hopes in Korea’s financial industry?
Shin: To tell you the truth, hopes and worries overlap when I think of the future of our financial industry. I see hopefulness whenever I see talented young generation. I saw in Hong Kong countless Korean young people full of enthusiasm and competence. However, on the other hand, people’s recognition towards Korea’s financial industry has not always been positive. It is very important to think of finance as an industry but people still tend to regard finance as an economic tool that supports real economy. If financial firms make profits some people even think those companies exploited customers’ money. Such negative recognitions toward financial industry are the challenges we face.
MK: What are necessary steps to enhance financial industry’s competitiveness?
Shin: People ask why there aren’t any companies like Samsung Electronics in the financial sector. I believe trust and networks are the two key elements to do so but the problem is they require lots of time to accumulate. That’s because there can’t be any jackpot or big hit products like cell phones and cars in finance. To such backdrop, asset management business has already accumulated some trust from overseas investors and asset management business require comparatively less time to win trust and secure networks than banking or insurance sectors. That is the reason why the government if focusing on overhauling regulations related to the asset management business.
MK: What is your advice to Korea’s financial firms when expanding business overseas?
Shin: Conclusion I made after listening to various opinions is that financial companies have to undergo thorough preparation before heading offshore. Nomura Securities’ Asia Head emphasized the importance of CEO’s management philosophy and long-term view. A CEO might not be able to set up offices in overseas countries during his or her term. But still, he or she has to loot out to a further future for the good of the organization.
MK: Do you think Tong Yang incident might pose negative impact to the financial vision?
Shin: I won’t say no. However, we will deal with the issue based on the principles. Making major stakeholders accountable is the principle we have always been holding on to when restructuring a company. We will always be the protector of victims of good faith. The government will not judge which company to bail out and which not to based on presumption. It is desirable for the market and creditor banks to decide.
(The above are excerpts from Maekeyung Newspaper article on October 15, 2013)