[Inbaeng 2.0]③Survival Amid Turnover...Heavy Shoulders of Representatives

Yoon Ho-young, CEO of Kakao Bank

Among the unprecedented external shocks sweeping through the financial sector, the shoulders of the CEOs of internet-only banks who have maintained their positions are growing heavier. This is because the pressure is increasing not only to fulfill social responsibilities as banks but also to promote competition in the banking industry through innovation as internet-only banks.

According to the financial sector on the 13th, Yoon Ho-young, CEO of KakaoBank, recently succeeded in his fourth term. If CEO Yoon is appointed as the representative director at the shareholders' meeting at the end of this month, he will lead the KakaoBank ship for a total of nine years. CEO Yoon has been with KakaoBank since the preparation corporation stage in 2016.

Thus, unlike the CEOs of financial holding companies who recently announced their retirement, CEO Yoon has succeeded in long-term leadership alone. Previously, the CEOs of Shinhan, Woori, and NH Nonghyup Financial Holding Companies retired citing generational change as a reason when the issue of 'self-renewal' arose.

The prevailing view is that CEO Yoon's fourth term cannot be equated with the reappointment attempts of financial holding company CEOs. First, due to KakaoBank's characteristics, which possess both the identity of a bank and Kakao's DNA, it is analyzed that it was difficult to find a replacement for CEO Yoon.

An industry insider familiar with the situation said, "Since internet-only banks have a short history and also have characteristics of IT companies, it is important to know the internal situation well, so it would not have been easy to bring in an outsider," adding, "CEO Yoon has a strong drive and considerable organizational control."

There is also the characteristic of KakaoBank being a company with owners, unlike major financial holding companies. In the case of KakaoBank, Kakao holds 27.17%, and Korea Investment & Securities holds 27.17%, with the first and second largest shareholders holding a majority stake.

Consistent strong performance is also evaluated to have contributed to the reappointment. Although the stock price has fluctuated, KakaoBank posted a record high operating profit of 353.2 billion KRW last year and surpassed 20.42 million customers, continuing steady growth.

Seo Hoseong, CEO of K Bank (left), Hong Min-taek, CEO of Toss Bank

In the case of K Bank and Toss Bank, there is still time left until the end of their terms. Seo Ho-sung, CEO of K Bank, has a term until the end of this year. Hong Min-taek, CEO of Toss Bank, has a term until the shareholders' meeting in March next year. While K Bank, which has KT as its parent company, may have slightly different circumstances, there is also an interpretation that Toss Bank will follow a similar path as KakaoBank. Toss Bank, although the latest entrant, has grown rapidly enough to threaten KakaoBank.

Moreover, internet-only banks are relatively smaller in size and have less influence on the industry compared to the four major financial holding companies, so they tend to be somewhat outside the financial authorities' main focus.

Although they succeeded in reappointment, all of them bear heavy responsibilities as they are tasked with social responsibility and innovation. Lee Bok-hyun, Governor of the Financial Supervisory Service, also urged at a meeting with internet-only bank and fintech representatives on the 27th of last month, saying, "Internet-only banks and fintech companies are increasingly expected to play roles and have a greater share as 'agents of change' in expanding financial service accessibility and consumer choice."

In the case of KakaoBank, which appeared as a market disruptor, there are criticisms that the innovation seen in the early stages is hard to find now. K Bank's CEO Seo's shoulders have grown heavier after postponing its listing. Toss Bank also succeeded in settling in the market with initially disruptive interest rates but has not had any significant follow-up moves since.

A financial sector insider said, "The convenience that was the initial weapon of internet-only banks has already been largely matched by commercial banks, and the same goes for interest rate competition," adding, "It is time to develop competitiveness that can compete with commercial banks at the core business level."