Foreign banks operating in South Korea are seeking to cut costs and focus on profitable business areas as they face growing competition with domestic banks.
Foreign banks have a meager share in the domestic market. Citibank Korea saw its market share decrease from 2.5 percent in 2014 to 1.8 percent now, while Standard Chartered Korea showed a similar trend. They have failed to make great improvements in assets and net profits. In order to depart from the status quo, the two banks have recently streamlined their operations to focus on areas that can raise profitability.
Standard Chartered Korea first decreased the number of branches from 283 in 2014 to 238 and is now focusing on strengthening its competence in digital and wealth management. The bank has been selling more than 50,000 new products until now after releasing its flagship mobile banking app “Self Bank” last year. The app allows customers to use services without authentication certificates. In addition, it has recently started offering “Keyboard Banking” service that enables customers to carry out simple banking services, such as sending money and viewing account details, by clicking its bank logo without downloading additional apps.
Citibank Korea has recently closed down 90 branches, which amount to two thirds of its total branches. It plans to reinforce digital channels and concentrate on asset management that shows higher customer demand and profitability.
Citibank Korea launched its mobile app in 2016, allowing customers to check their bank accounts without authentication certificates, and reinforced the app’s functions by establishing a new Internet banking platform last year.