Changing Banks... Building a Slim and Flexible Body
[Asia Economy Reporter Park Sun-mi] The banking sector, traditionally regarded as a representative industry with a conservative corporate culture, is rapidly reorganizing into a horizontal and flexible organizational culture. This shift is based on the judgment that a flexible and efficient organizational culture is essential to respond to the fast-changing financial environment, including non-face-to-face financial transactions and competition with big tech (large information and communication companies).
According to the banking sector on the 26th, Kookmin Bank is conducting detailed personnel and organizational restructuring until the end of February after carrying out inter-group personnel changes on the same day. The plan is to simplify the complex reporting system to enable faster decision-making by reducing the number of team leaders by up to half. The reporting system, which previously connected team leaders to department heads, will be transformed so that communication goes directly from team members to department heads through the reduction of team leaders. This reflects the will of President Heo In, who emphasized in his New Year's address that "we must dramatically increase the speed of response to customers and the market and spread an autonomous and creative organizational culture."
Earlier, Hana Bank also implemented a radical organizational restructuring to promote a horizontal organizational culture and swift decision-making. Hana Bank reduced its existing 18 groups, 1 research institute, and 19 headquarters (units) to 15 groups, 1 research institute, and 17 headquarters (units) to streamline the organization and speed up the decision-making process. Instead of using ranks such as manager or director, a new culture of calling employees by English names was expanded and established across all affiliates and branches. In fact, Hana Bank President Ji Sung-kyu is called by his English name ‘Glocal’ instead of the title of bank president.
Shinhan Bank also shortened the executive rank system from the previous three levels of vice president - senior vice president - managing director to two levels of vice president - managing director to increase decision-making speed and strengthen business execution capabilities. Additionally, to spread a horizontal organizational culture, ranks such as manager and deputy manager were eliminated, and titles were unified; some departments apply the title ‘Pro’.
Faster and More Efficient Decision-Making Through Organizational Slimming in the Banking Sector
Banks Join Organizational Culture Changes Amid Changing Environment
Woori Bank also focused on organizational slimming. It abolished three business groups and reduced the number of executives to significantly streamline the organization. The Personal Group and Institutional Group were integrated into the ‘Personal & Institutional Group,’ under which the Real Estate Finance Division was placed, and the Corporate Group and SME Group were merged into the ‘Corporate Group,’ with the Foreign Exchange Business Division placed under it. The HR Group and Business Support Group were also integrated into a newly established ‘Management Support Group’ to enhance organizational efficiency. Despite the integration and slimming of the organization, the establishment of a new ‘Sales & Digital Group’ to strengthen the linkage between digital innovation and sales and to enhance both face-to-face and non-face-to-face sales capabilities is a noteworthy aspect.
NongHyup Bank focused on expanding the agile organization called ‘cells’ in this year’s organizational restructuring. President Kwon Joon-hak, who began his term this year, emphasizes that building an agile organizational culture is very important to sense changes in customers and the market and respond in a timely manner.
While the spread of horizontal organizational culture and organizational slimming has been applied by many domestic companies, it had been progressing slowly in the somewhat conservative financial sector. A bank official said, "Since last year, with the spread of COVID-19 accelerating digital transformation and the need for preemptive responses in competition with big tech increasing, the pace of organizational culture change in the banking sector is also accelerating," adding, "The entire banking industry deeply recognizes that building a horizontal organizational culture and slimming the organization are inevitable for innovative finance and rapid decision-making."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
