Inbank replaces Digital Bank, Jeju Bank's Challenge [Local Bank New Survival Strategy Part 1]

[Financial News] Jeju Bank is advancing as a 'national digital bank'. It plans to enter the non-face-to-face loan market targeting small businesses and SMEs nationwide in partnership with Douzone Bizon.
Douzone Bizon, instead of the 4th internet specialized bank, becomes the second largest shareholder of Jeju Bank and engages in joint business. Douzone Bizon is the No.1 enterprise resource planning (ERP) company, strategically invested by Jin Ok-dong, chairman of Shinhan Financial Group, when he was the president of Shinhan Bank.
Jeju Bank plans to enhance profitability by supplying corporate loan products for them based on the data of Douzone Bizon's 3 million SME and small business member companies. Jeju Bank's digital bank challenge serves as a group-level testbed, and if successful, it is expected to expand to Shinhan Bank, a core affiliate of Shinhan Financial.
Additionally, Jeju Bank is proactively announcing its inclusive finance plan to 'reinvest the profits earned as a digital bank into the Jeju region', thus taking the lead in practicing 'coexistence finance', which has emerged as a task of the times.
According to the financial sector on the 26th, Jeju Bank plans to rapidly enter the non-face-to-face small business loan market to achieve the goal of becoming a 'SOHO specialized bank' by 2027. With commercial banks, existing internet specialized banks, and the 4th internet specialized banks turning their eyes to the non-face-to-face small business loan market, it plans to 'dominate' the market 2-3 years ahead.
A senior official from Jeju Bank said, "Jeju Bank's vision is to preemptively dominate the market as a small business specialized bank," adding, "It will become a nationwide digital bank beyond Jeju."
Jeju Bank is actively reviewing the 'sub-bank' strategy to dominate the non-face-to-face SOHO loan market. By analyzing the capital flow of approximately 2.3 million small businesses and small business corporations and about 700,000 SMEs owned by Douzone Bizon, it aims to propose customized loan products needed by them, establishing its position as a sub-bank while aiming to become the main bank.
Without the need to prepare separate documents, transactions are conducted through non-face-to-face channels, speeding up corporate loan approvals. A Jeju Bank official explained, "If the data owned by Douzone Bizon is integrated into the bank, real-time capital flow and transaction information can be viewed," adding, "By providing the short-term funds they need first, it can play the role of a sub-bank and eventually become the main bank."
Since Jeju Bank holds a banking license, it can start the transition to a digital bank without the process of obtaining bank approval, which is also an advantage.
According to Jeju Bank's task force (TF), it plans to launch customized loan products as early as January next year, or at the latest within the first quarter, and start new business as a digital bank. Until then, it plans to develop non-face-to-face credit evaluation models and loan products for small businesses and small business corporations, and SMEs, and complete the construction and integration of the computer system to become a digital bank.
The TF, consisting of about 30 people, includes dispatched employees from Shinhan Financial Group. As Jeju Bank's transition to a digital bank is a strategic decision at the group level, the holding company is directly supporting it.
Multiple senior officials from Shinhan Financial said, "When considering the challenge of the 4th internet bank and Jeju Bank's transition to a digital bank as Plan A and Plan B, respectively, it was comprehensively decided which option is a better choice for Shinhan Financial and how to differentiate and save Jeju Bank."
Jeju Bank plans to continue face-to-face sales for Jeju residents with a 'two-track' strategy along with the transition to a digital bank. Jeju Bank has presented the principle of 'inclusive finance within innovation', supporting local and medium-low credit SMEs that have been excluded from capital supply, and reinvesting the profits secured by advancing to a nationwide digital bank into the activation of Jeju region finance. A senior official from Jeju Bank emphasized, "Inclusive finance is the role and responsibility that Jeju Bank, as a local bank, should fulfill."
gogosing@fnnews.com Park So-hyun, Lee Joo-mi reporters