Financial heads call for risk management, innovative growth

Risk management, innovative growth and adopting environmental, social and governance (ESG) initiatives were the key issues raised by financial institution heads in speeches to mark the start of the new year.

Nah Jae-chul, chairman of the Korea Financial Investment Association, speaks at a briefing in Yeouido, western Seoul, in July. [NEWS1]

Risk management, innovative growth and adopting environmental, social and governance (ESG) initiatives were the key issues raised by financial institution heads in speeches to mark the start of the new year.

Chairman of the Korea Financial Investment Association (Kofia) Nah Jae-chul on Sunday pledged to make “reasonable improvements” in the financial taxation system, like abolishing the securities transaction tax and offering tax benefits to long-term investors.

Kofia is a self-regulatory organization with a membership that includes securities dealers, asset managers, future dealers and real estate trusts.

“Uncertainties in the economy and the financial market are expected to persist, but Kofia will strengthen financing for innovative growth,” said Nah in a statement released on Sunday in celebration of the new year.

“For the success of the Korean New Deal businesses, which is aimed at bringing Korea’s economy forward, [Kofia] will actively support the vitalization of new deal funds to actively support our financial market.”

Nah also vowed to create an infrastructure to follow ESG initiatives and ESG-driven financial products.

Improving the taxation system and the retirement pension system are also areas Nah promised to support based on “digitization” and “globalization.”

Growth based on digitization was also highlighted by Kim Jung-tai, chairman and CEO of Hana Financial Group, in a New Year’s speech released last week.

Kim highlighted the importance of platform-based finance as “an optimal tool” to expand the group's customer base and promote “exponential growth."

“In the digital era, boundaries are no longer meaningful," Kim said. "Targeting global markets should be considered from the beginning of a business model,” said Kim.

Kim explained that platform-based finance is one of the answers to overcoming the external difficulties the financial industry faces, like the entrance of new players, intensified regulations and low interest rates.

Kim also mentioned the importance of ESG initiatives, as the demand for a firm to take responsibility over its actions has grown larger internationally. Pressure by BlackRock, the world’s largest asset manager, to divest from coal investment is one of the examples of intensified responsibility.

Financial Services Commission Chairman Eun Sung-soo spoke about overcoming the post-pandemic economic crisis, stabilizing finance, innovative growth and regaining trust as the major factors for the financial market this year.

Eun vowed to continue support for independent business operators hit hard by the virus and to pre-emptively manage risks like increasing household loans, which could result from higher liquidity.

“It’s important the liquidity released in the market to respond to Covid-19 is used for innovative growth,” said Eun in a statement on Thursday, while vowing to protect investors — many of whom suffered damage from the Lime and Optimus incidents.

BY JIN MIN-JI [jin.minji@joongang.co.kr]