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Finance

Finance

Overview

Korea has a highly developed and profitable financial services sector including the third largest insurance market and third largest banking market in Asia. The stability of the banking sector is underpinned by strong fundamentals and active regulation. At less than 1%, South Korea’s non-performing loan ratio is low by regional standards. Foreign investors own some 70% of the banking sector. The relaxation of controls on cross-ownership of financial services has further opened up opportunities for market entry, acquisition and business development. As international financial services groups look to develop their footprint in Asia, a presence in Korea is becoming increasingly attractive, and perhaps even essential.

There are already 200 South Korean companies with a presence in the UK, and 15 listed on the London Stock Exchange.

Impact of the EU-Korea FTA

Implemented in July 2011, the EU-Korea FTA will lead to the removal of 97% of all tariffs for UK exporters. The FTA contains provisions on services, public procurement, intellectual property (IP) and sustainable development as well as the liberalization of goods tariffs. The FTA has ushered in enhanced protection for IP rights and improved copyright regulations.

Potential Opportunities

  • South Korea’s asset management market is expected to grow continuously due to capital shift from physical assets to financial assets; higher allocation to risky assets due to low interest rates; and the forming of a circle between the asset management market and institutional investors, including pension funds.

  • The popularity of bank assurance in distributing life insurance is expected to support segmental growth over the next five years.

  • South Korean banks are strongly protected by the government, but the country’s main financial regulatory body, the Financial Services Commission, aims to increase transparency in regulation and facilitate the introduction of new financial products

Case Study: Leading Wealth Management Consulting Services Provider

The Brief

A leading UK-based wealth management consulting services provider engaged the BCCK to help them understand the Korean pension funds market and arrange meetings with senior decision-makers at major private companies and public organisations managing pension funds in Korea. The company ultimately aimed to enter the market.

The Approach

The BCCK’s extensive network in the financial industry and ability to learn quickly about the sophisticated financial products/services the company enabled the company to meet with the most relevant financial companies and organisations to discuss potential partnerships. The BCCK provided strategic advice and recommendations throughout the process of selecting which companies to meet; how to structure and frame meetings for the best outcomes; and provided in-person visit support, including interpretation during the meetings.

The Outcome

The company gained valuable market intelligence from direct stakeholders in the Korean pension funds industry and successfully initiated conversations with potential customers and partners. Based on the meetings the BCCK supported, the company was able to view the market with a more strategic perspective, and it plans to continue working with the BCCK to capitalise on the momentum of developing business in Korea.

Sector Specialist

Taewon Um

Director, Trade Services

Taewon Um is the Director of the BCCK’s Trade Services team. Taewon has a bachelor’s degree from the University of Michigan, Ann Arbor. Prior to joining the BCCK, Taewon worked with a Korean government body to attract FDI and helped sign deals with major international healthcare institutions. Taewon also worked at the World Bank and the Embassy of Korea in Washington DC. Whilst at the BCCK, Taewon has worked with companies across a broad range of sectors including financial services and industrial materials amongst others. His past clients in the financial services space include SEI and Baillie Gifford.  LinkedIn

Email: taewon.um@bcck.or.kr

Testimonial

“The depth of talent and breadth of influence which BCCK wield in the Korean market in unsurpassable. We discovered this first hand following our decision to engage BCCK on a project to understand how our investment products could be used by Korean pension funds. We were very impressed by BCCK’s abilities to quickly understand our solution and set up a project plan for the research. More importantly, with very little time at their disposal, they were able to obtain access to some of the largest organisations and set up meetings with key decision makers. We hope to continue working with them as we delve deeper and start implementation of our plans.”

– Ashish Kapur, Head of European Institutional Solutions, SEI

Companies Supported

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