Regional banks are making another attempt at nationwide corporate financial expansion. This time, they are collaborating with fintech companies to enhance the launch of non-face-to-face financial services and products. Regional banks have previously established branches in the metropolitan area but, learning from their experiences of being outcompeted by commercial banks, are now devising low-cost, high-efficiency strategies.
According to the financial sector on the 22nd, BNK Busan Bank is collaborating with fintech company Connexion H to launch its Oncell service this month. Busan Bank's Oncell service targets online shopping mall businesses by providing financial analysis data. Through this service, Busan Bank plans to increase its connections with small and medium-sized corporations and small business owners across the country and develop loan products tailored for online shopping mall operators.
Jeju Bank is accepting DOUZONE as its second-largest shareholder and is promoting its ERP banking business. ERP banking refers to a service that adds financial products to Enterprise Resource Planning (ERP), a management program used by corporations for personnel, accounting, inventory management, etc. Currently, DOUZONE's ERP service is being considered as a platform for integrating Jeju Bank’s corporate financial products. With 3 million businesses using DOUZONE's ERP, Jeju Bank is devising strategies to attract them as customers.
The business strategy of regional banks can be summarized as non-face-to-face, low-cost, and high-efficiency. Instead of face-to-face sales based on branches, the aim is to create non-face-to-face financial services, thereby reducing long-term input expenses and increasing sales efficiency. A regional bank official noted, “Although a lot of money is invested in program development initially, once the service is launched, maintenance costs are lower, making non-face-to-face sales more efficient.”
Additionally, regional banks have previously experienced setbacks in their attempts to target corporations through face-to-face sales. They were only allowed to establish branches in metropolitan areas outside the city where their headquarters were located. The opening of regional banks' branches in Gyeonggi Province was first permitted in 2015, and as regulations were relaxed, regional banks began establishing branches in the metropolitan area, attempting to expand corporate loans. However, they could not achieve significant results, being outmatched by commercial banks in loan interest rate competition. As a result, they substantially withdrew their face-to-face sales strategy in the metropolitan area. The number of regional bank branches in the metropolitan area, which increased to 68 after the regulatory easing, dropped to 53 by the end of last year.
As regional banks view the non-face-to-face corporate financial market optimistically, competition is expected to intensify. Opinions suggest that to gain a competitive edge in a non-face-to-face environment, business capabilities comparable to those of face-to-face services are necessary. A financial sector official stated, “For corporate clients, the timely disbursement of loans is crucial,” adding that “the credit review ability of each regional bank will be a significant battleground even in a non-face-to-face environment.”