South Korea

Korea’s two fully licensed digital lenders, kakaobank and K Bank, hit the ground running in the second quarter of 2017. Both were well-funded and backed by large institutional shareholders: investment management firm Korea Investment Holdings and KB Kookmin Bank both backed Kakao, while a slew of well-heeled investors including KT Corporation (South Korea’s largest telecoms provider), Woori Bank and China’s Ant Financial invested in K Bank.

A decade ago, the founders or scions of corporate empires dominated the rich lists. But in recent years, the face of wealth has changed to reflect the successes of a younger generation of entrepreneurs.

Foreign lenders have long struggled to crack Korea. It’s a tough place in which to operate; bruising and bitterly competitive, only the tough and fully committed survive.

Nominating a winner for this award is not easy. Korea’s economy is dominated by conglomerates whose interests stretch across multiple sectors and markets. Meeting their day-to-day corporate and investment banking needs is big business for local and foreign lenders alike, and the quality of service between one institution and another can be difficult to define and discern.

For Korea’s commercial banking sector, 2018 was an annus horribilis; many of the biggest lenders were assailed by recruitment scandals that claimed several chief executives, while underlying business was squeezed by a bunch of impressively disruptive digital upstarts.

Scandals, unexpected delays and arcane regulations are just some of the reasons why the country’s IPO market proved a big disappointment in 2018 – now the top financial regulator wants to bring in new rules to lift the market.

Dark memories of the Asian financial crisis inform South Korea’s fear of chaos and wariness of financial technology, but the success of two online banks gives the country what it needs: fintech leaders it can respect and disruption it can embrace.

Proving one’s worth in terms of corporate social responsibility isn’t easy. Some banks pay the concept little more than lip service or ignore it altogether. At the other extreme, PR-conscious global banks can often overshadow the quieter success stories that are woven by smaller regional or local lenders.