This study seeks to review market-opening and the conditions of domestic and international financial industries; thus examining the present and future of the global financial industry. Ultimately, the study seeks to suggest development directions and internationalization strategies for the domestic banking industry.
The global financial industry has been going through a huge structural change since the 1980s. Among these changes some of the most notable ones are the globalization of financial markets due to the quick spread of liberalization and innovations around countries, persistently increasing deregulation of banking regulations among developed countries, and the securitization of finance as fund management is switching into a direct financing system.
Meanwhile, the domestic banking industry is likewise going through a huge transition as pressure is rising for the financial system’s reform and liberalization of the financial service section in order to increase the market’s efficiency. In particular, the country is at a position where it has to self-initiate the opening of its domestic financial market and liberalize capital movement, in line with the globalization and liberalization taking place in a global context. Given this situation, there is a need to develop a new strategy for internationalization for a new market of competition to be built after the opening of the banking industry.
The domestic banking industry is under strict government regulation while its infrastructure and its network for international finance are weak. The scale of capital for domestic banks is small compared to their foreign counterparts in developed countries. In addition, the lack of regulations and a developed market means a lack of international finance experts as well. The computer system is also undeveloped, placing the country in an inferior position in the competition between banking entities of other countries.
In terms of foreign currency acquisition and overseas expansion projects, up until the recent past, Korean banks were able to enter foreign markets with policy support from gyopos–Koreans residing abroad. More critical is the fact that Korean banks initiated internationalization even before achieving a clear sense of business objectives or assessing international work and competition, and without completing a sufficient feasibility study beforehand. As a consequence, the number of foreign branches and their business scale increased, but they are unable to build a sustainable base for business by diversifying the types of work and of profit sources. Therefore, a re-examination of the banking industry’s internationalization plan must be conducted, while meticulous inspection will have to be carried out to identify what aspects of competitiveness individual banks will have to attain before entering foreign markets. The study not only examines the aforementioned plans of internationalization, but also identifies constraint factors regarding the domestic banks’ consolidation of competitiveness for international business, suggesting solution plans for the identified constraint factors.
개방화에 대응한 우리나라 은행의 국제화 전략(Study on the internationalization strategies of the Korean banking industry in response to market-opening)
[서울] : 한국금융연구원
|Series Title; No||KIF 금융 Paper|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Financial Policy|
|Holding||한국금융연구원; KDI 국제정책대학원|