April 20, 2024

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[THE INVESTOR] Korea Investment & Securities has set its sights on digital transformation and creating synergies with sister companies including Kakao Bank, its newly appointed chief executive Jung Il-mun said on Jan. 7.

Through such strategies, Korea’s fifth-largest securities firm has targeted an operating profit of over 1 trillion won (US$893.73 million) this year.

“We are neither affiliated with a banking group nor a conglomerate, so cooperation between subsidiaries is inevitable for survival,” Jung said during his first press conference as CEO. 

Korea Investment & Securities CEO Jung Il-mun (KIS)

KIS will begin issuing brokerage accounts through Kakao Bank, Korea’s leading internet-only bank, in the first quarter. This would mark the first time that an online bank is allowed to create a brokerage account. Industry watchers believe it would help push more conventional financial institutions to think out of the box.

Korea Investment Holdings -- the parent firm of Korea Investment & Securities -- holds a controlling 58 percent stake in Kakao Bank.

“Tech companies are increasingly taking on the financial sector, and the conventional thinking and networks of (traditional financial companies) will become obsolete in the digital era,” Jung said.

Over the past few years, fintech companies have settled in as a part of the mainstream. More financial companies are looking to go digital, with many choosing to team up with tech firms to take advantage of new technologies such as artificial intelligence and machine learning. Some conventional companies, however, are still reticent to adapt, but this too is changing due to the shifting needs of customers, according to analysts.

“At first, KIS and Kakao Bank saw a huge gap in their understanding of the financial industry,” the KIS CEO said, recalling when the bank representatives demanded a shorter settlement period. “But we are now narrowing the gap, and customers will soon feel the changes.”

Jung was named CEO in November to replace of Yoo Sang-ho, who has served 11 terms since 2007 and has since been promoted to vice chairman.

Jung has over 30 years experience in the brokerage industry. He started his career in 1988 at Dongwon Securities, which was acquired by KIS in 2005, and has since been devoted to the investment banking business. He became KIS vice president in charge of retail business in 2016, being one of the rare brokerage executives to have spent the entire career in a single firm.

Touching on the looming Financial Supervisory Service’s order on allegation that a 167.3 billion won (US$149.44 million) short-term loan to a an individual was illegitimately disguised as one to a special purpose company, Jung said KIS would comply. The financial regulator is scheduled to reexamine the case on Jan.10.

By Son Ji-hyoung (consnow@heraldcorp.com)