Shinhan Bank Successfully Secures Seoul City Treasury Bank for 3rd Year, Embarks on New Challenges

Seoul City Officials Highly Satisfied with Shinhan Bank's Service Amid Inconvenience of Some Urban Railway Bonds Not Issued, Causing Citizens to Visit Nearby Shinhan Bank Branches... Kim Hodae, Head of Institutional Customer Division, Shows Strong Determination for Seoul City Treasury Rebid and Additional Acquisition of 20 District Treasury Accounts

Shinhan Bank Seoul City Hall Financial Center Exterior View

[Asia Economy Reporter Park Jong-il] Shinhan Bank is marking its third year as the Seoul Metropolitan Government’s treasury bank this year.

Shinhan Bank won the Seoul treasury bank contract in 2018, taking over from Woori Bank, which had managed it for 104 years, causing a stir and officially starting operations in January 2019.

Additionally, Shinhan Bank was selected as the treasury bank for five of Seoul’s 25 autonomous districts: Yongsan-gu, Seongdong-gu, Gangbuk-gu, Seocho-gu, and Gangnam-gu.

In particular, since securing the Seoul treasury bank contract, Shinhan Bank has invested massive funds to develop systems, earning high praise not only from Seoul city officials but also from district government employees and entrepreneurs involved in bidding projects with Seoul and the districts.

First, we asked Team Leader A, a Seoul city official we met recently on the first floor of the Seoul City Hall, about his impressions of using Shinhan Bank over the past two years.

He said, “Since Shinhan Bank came in, the satisfaction level among Seoul city officials has been very high. The atmosphere is much brighter than the previous bank, and the quality of financial services seems to have improved.”

Another official, Mr. B, expressed great satisfaction, saying, “I recently consulted about a jeonse loan, and a Shinhan Bank employee proactively proposed products from the customer’s perspective, making the loan process convenient and quick.”

Background of Shinhan Bank Winning the Seoul Treasury Bank Contract?

In 2018, Shinhan Bank won the Seoul treasury bank contract, which had been handled by Woori Bank for 104 years. Since Seoul is the heart of South Korea, about 42 million local tax payments are collected annually, and the scope is broad and complex.

Also, Seoul uses its own ETAX system instead of the Ministry of the Interior and Safety’s Wetax system for local tax collection, so it was expected that the treasury bank would not change easily.

However, based on its past experience managing the Incheon treasury bank, Shinhan Bank promised improvements to the IT system by investing heavily in large-scale computer system construction, successfully winning the Seoul treasury bank contract, which Woori Bank had monopolized.

Improvements to the Seoul Treasury Bank System by Shinhan Bank and Future Plans?

So, how has the Seoul treasury bank system improved since Shinhan Bank took over?

Seoul city official Mr. C said, “Shinhan Bank has built a system that is incomparable to the previous Woori Bank.”

Woori Bank, having monopolized the treasury bank for a long time, operated the treasury system from its own data center, so the system was not independent, and there was little investment or development in new systems, according to many evaluations.

Therefore, Seoul placed the greatest emphasis on IT system improvement when selecting the treasury bank.

After being selected as the treasury bank, Shinhan Bank established the ‘Treasury IDC Center’ in Sangam-dong, completely separating the treasury system from the bank’s system, and built the ‘Treasury Integrated Center’ near the city hall to improve accessibility.

Also, the Seoul ETAX website and STAX app expanded payment options from only Woori Bank accounts to all banks, adding payment methods through simple payment services like Samsung Pay and Naver Pay.

Furthermore, tax payment notifications via KakaoTalk were enabled, and an advanced AI chatbot service was implemented to provide convenient payment services that consider people with disabilities and vulnerable groups.

The improvement of the Seoul treasury bank system led to differences in treasury capabilities among the 25 districts. In the subsequent district treasury bank bids after the Seoul treasury bank selection, five district offices including Yongsan-gu and Seongdong-gu chose Shinhan Bank. The remaining 20 districts chose the existing Woori Bank, and two districts, Gwangjin-gu and Nowon-gu, selected KB Kookmin Bank.

However, in districts dealing with only one bank, there was an incident where some urban railway bonds were not issued, causing residents to visit nearby Shinhan Bank branches near the district offices.

Also, in the five districts dealing with Shinhan Bank, local tax manual notices are automatically processed through Shinhan Bank’s AI system, whereas in the 20 districts, officials manually input data daily, causing delays in residents’ tax payment confirmations.

Shinhan Bank plans to continuously advance the treasury system, so this gap is expected to widen further.

Kim Ho-dae, Head of Institutional Customer Division, Shows Strong Will for Seoul Treasury Bank Re-bid and Additional Acquisition of 20 Districts

Kim Ho-dae, Head of Institutional Clients Division, Shinhan Bank

The next treasury bid for Seoul and its 25 districts is scheduled for 2022, coinciding with local government elections. Shinhan Bank, having invested huge amounts in securing the Seoul treasury bank contract and developing the IT system, insists on retaining the contract.

It also showed a strong will to secure many districts for stable treasury operations.

Kim Ho-dae, who was promoted after serving as the head of Shinhan Bank’s Seoul City Hall Financial Center until last year and is now head of the Institutional Customer Division, said, “Our top priority is stable operation of the Seoul treasury bank and continuous system improvement,” adding, “We will build a stronger and future-oriented partnership between Seoul and the treasury bank to actively support and assist Seoul’s administration.”

He also stated, “Through this, we will provide convenience to Seoul citizens in local tax collection and establish a partnership as a smart financial partner.”

Attention is focused on what role Shinhan Bank will play as the treasury bank during the next two years of treasury operations.