Compassionate Finance
“We will make the world a better place with the strength of finance.”
- Principle
- ‘Compassionate Finance’ means the Win-Win relationship of making customers successful by thinking about customer values and ensuring customer protection. Furthermore, it can be seen as a growth of social community that fulfills social responsibilities and considers the socially disadvantaged or the neglected. We think that the values shared between customers and the company can both increase in the long run if everything is considered from the customer’s perspective before implementation.
- Objective
- In order to realistically implement the Compassionate Finance, Shinhan Financial Group improved the system and infrastructure and expanded it as a corporate culture to strengthen communication with stakeholders, thereby realizing the Compassionate Finance within the financial industry to receive the consensus of our customers.
PERFORMANCE
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In order to ensure the working class hoping to start their own business
can easily receive the startup education, we carry out a company-wide
program together with the professional institutions of small business
startups. In the year 2012 alone, a total of 3,282 small business
owners completed the startup education so that they can go
on to see the light of new hope. - 3,282
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We provide preferential interest rates to customers who are experiencing
temporary difficulties such as worsened financial conditions for mostly
long-term loan customers. In the year 2012 a total of KRW 34.2 billion
in interests were deducted from 4,275 cases. - 34.2
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The New Hope Spore Loan is a joint CSR product
of the banking industry that increases the benefits
of financial use for low-income and bad credit
customers. We provided a total of KRW 328.2 billion in
loans through 33,369 consultations on loans in 2012 alone. - 328.2
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We provided financial support to
low-income working class customers by giving
preferential treatment on commission fees
for 58,404 cases in 2012. - 58,404
Compassionate Finance Emblem
This emblem symbolizes our will to create financial ‘Warm Wind’. The design features a dove which in the original corporate identity of Shinhan Financial Group symbolizes ‘Hope.’In place of the blue which represents ‘Trust,’ red and orange express the warm image as well as the passion of the Shinhan Financial Group for ‘Compassionate Finance.'
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Primary
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Grid System
Start of Compassionate Finance
The standard of value that society demands from companies is changing.
As a result of increased social and economic polarization in our society, there is a growing awareness that sustainable growth is not possible without showing concerns to the underprivileged. Also, the values that our society demands from companies have changed. Instead of the paradigm of only seeking increased profits for the shareholders, there is a widespread perception that we should resolve all problems in society together and proactively accept the demands of stakeholders. Based on this, Shinhan Financial Group is implementing the Compassionate Finance to establish the foundation for sustainable growth by creating a warm consensus through the financial business with customers and the society.
We dream of an abundant and warm-hearted society.
The motto of Shinhan Bank when it was established before the Shinhan Financial Group in 1982 was ‘New, Fruitful, and Compassionate”. The meaning of ‘New’ was to establish a new standard in the Korean financial industry through different methods from other existing banks. ‘Fruitful’ means to create a sound and solid bank. ‘Compassionate’ means to contribute in making our society more abundant and warm-hearted society. Shinhan Financial Group proposed a new management principle of Compassionate Finance by carrying on the spirit of the early stages of startups. The Compassionate Finance refers to striving to create customer values and ensure customer protection by considering customers as the partner of Win-Win management. It also means being considerate of the socially disadvantaged and fulfilling social responsibilities that meet the demands of the time. Shinhan Financial Group will implement its daily operations so that our customers and society can benefit from them instead of making them one-time participants that follow the recent trends, thereby gaining the trust of customers and building the foundation for customers to grow together.
We will follow sustainable growth as the spirit of the age through creating shared values.
Since the global financial crisis, the speed of the global economy’s growth has greatly slowed down. In the past when the speed of growth was faster and companies focused on growth, any side effects that emerged could be covered under the name of growth and development. However, if we continue to follow strategies that place the priority on growth when the growth has slowed, the side effects will increase exponentially. Therefore, it is necessary for companies to make fundamental changes that meet the spirit of the time, such as changing the management system and corporate culture that maximize growth and profits to achieve long-term sustainability. Also, by creating shared value (CSV) strategies should expand areas that can satisfy the company’s economic values and the local community’ social values, ultimately seeking ways to contribute to the society through financial business such as Compassionate Finance. Shinhan Financial Group will carry on the spirit of the early stages of startups ‘making the world a better place through finance’ to continue on the growth and success achieved so far. As a company that genuinely strives for customer’s success and pursue shared growth with the country and society, we will become Shinhan Financial Group that brings warmth to all corners of our society, while also maintaining efficiency and profitability.
Strengthening of Compassionate Finance
We will systematically implement the Compassionate Finance.
Shinhan Financial Group established the ‘Compassionate Finance Promotion Group’ within the holding company and each group company selects and carrys out implementation tasks that suit each company. Also, the ‘Compassionate Finance Promotion Committee’, which consists of executives of the holding company and group companies, regularly monitors and evaluates the activities being implemented, while also making reports on major implementation activities at the Group Management Meeting where the group’s major issues are discussed.
We will spread the internal consensus on Compassionate Finance.
In order to establish a consensus with employees through communication, we added the Compassionate Finance section on the group’s communication website (WAF) to receive suggestions from employees and share practical cases. Also, the holding company’s ‘Compassionate Finance Promotion Group’ evaluates the level of understanding by employees through on-site visits and listens to external factors. The group’s CEO also made efforts to communicate with the working-level employees by arranging an occasion to share his management philosophy on Compassionate Finance and narrow the space between him and the working-level employees. In addition, the importance of Compassionate Finance is engraved on the employees who are used to focusing on performances by actually reflecting them in the evaluation (CEO strategic tasks, etc.) to enhance execution.
Also, in order to implement the Compassionate Finance not just in Korea but to apply it in the Asian region, which is the group’s strategic target market, we introduced the ‘Shinhan Asia Quest Together with Compassionate Finance’ to allow the group’s employees to experience local cultures as well as provide opportunities for overseas CSR activities. Also, in line with the group’s local subsidiaries, we had the meaningful time of participating in joint volunteer works and delivering donations.
Implementation of Compassionate Finance
We think of our customers as the partner for Win-Win management.
The Compassionate Finance places the top priority on creating customer values and ensuring customer protection by thinking of customers as the partner of Win-Win management, while also providing assistance to customers who are facing temporary difficulties. Along with this, Shinhan Financial Group is implementing various activities to provide assistance to the socially disadvantaged and the neglected.
We implement the Compassionate Finance to be practiced in the field.
Shinhan Bank has introduced a consumer protection index that is reflected in the evaluation of sales offices so that the Compassionate Finance is implemented in the field and actually felt by the financial consumers instead of just remaining as a slogan. The consumer protection index establishes the overall customer-oriented thinking in consultation, sales and management and strategically manages the quality of service from the financial consumer’s perspective. The results of measurement is reflected in the monthly evaluation of sales offices.
Shinhan Card plans to increase the number of companies on the shopping mall operated by our company’s homepage to create shared values for society and pursue Win-Win management. Through these efforts, we will help the expansion of sales channels for small and medium-sized companies and utilize Shinhan Card’s marketing resources to effectively support the marketing activities of small-sized merchants, thereby increasing the sales of small and medium-sized companies on the shopping mall.
Shinhan Investment established an evaluation system for return on customer (ROC). Employees receive better evaluation and incentives if the ROC is higher, which motivates employees to bring out the success of customers. In 2012, the amount of return and profit was calculated and rewarded for offline management accounts each month. Shinhan Investment also holds the Talk-Talk Day to improve the customer’s level of satisfaction for sales employees. The Talk-Talk Day is a preventive process that protects customers by contacting them when there is more than a 2% decrease (3% for two days) compared to the previous day as of the closing price standard. In order to stress the importance of customers to its life planners and enhance the company’s credibility to customers,
Shinhan Life is implementing the Compassionate Happy Service as its key program. It provides an opportunity to bring compassionate insurance by providing details about the joined insurance product once again, checking on whether or not there is an insurance accident, and updating on customer information. Meanwhile, Shinhan Life offers a video footage of best practical examples from life planners and employees each month to promote the atmosphere of implementing the Compassionate Finance across the company.
Priority tasks for Compassionate Finance
| Examination of all products and services provided |
Head office | Examine whether or not all products, services and sales processes provided to customers go against the values and profits of customers from the customer’s point of view. |
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| Sales office | Examine whether or not the products being sold to customers go against customer values and adjust cases of violation. |
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| Adoption of customer evaluation group |
In the case of introducing a new product and service, collect opinions from the customer evaluation group consisting of customers who are highly related to the applicable product and service and reflect them in the process. |
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| Adoption of a risk review system from the customer’s perspective |
In the case of introducing a new product and service, excluding the existing risk factors such as market, credit and operational risks, add a category to review the risks from the customer’s perspective (risk factors, etc.) and manage them. |
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| Examination of all of the evaluation systems for sales offices and business groups |
Identify areas that need improvement and reorganize the evaluation system, such as evaluating factors and campaign methods that can damage customer values. |
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| Introduction of a system for analyzing the implementation of ‘Compassionate Finance’ |
Conduct internal analysis on the employees’ level of understanding and efforts made for implementation on Compassionate Finance.(once every quarter) In the case of evaluating the brand value of Shinhan Financial Group and major group companies, evaluate the customers’ level of satisfaction on Compassionate Finance. (once every year) |
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We will find the Compassionate Finance in our lives.
Shinhan Bank is striving to make the bank feel more comfortable for the working class by providing pictures that explain the complicated process of borrowing loans for small business startups and making visits to them in person. In particular, it is mandatory to take the startup education hosted by the Korean Federation of Credit Guarantee Foundations, but it was held at Shinhan Bank’s head office so that the working class participants could receive the education more conveniently. These small efforts made from the customer’s perspective were developed into a company-wide program together with the professional institution for small business startups. Until now, approximately 3,282 participants received the education on small business startups and approximately 1,000 small business owners received loans from Shinhan Bank.
In order to provide financial benefits for low-income customers who are facing temporary difficulties, Shinhan Card introduced a system that supports interest-free installments for hospital expenses, which exempts installment interests when a low-income customer is hospitalized for a long period of time and has to pay in installments due to the large amount. Also, various systems were implemented to provide financial support to help customers who suffered from disaster damages such as flooding in order for them to get back to their normal life.
Shinhan Investment provides professional knowledge on stocks, bonds and the global investment environment to university students through the Shinhan Finance Academy, which is a local community activity of sharing knowledge, as well as giving advice on how to prepare for job interviews. In the year 2012 alone, a total of 891 participants completed the courses at the Shinhan Finance Academy. Furthermore, a variety of volunteer works are voluntarily conducted by employees together with students, including giving baths to the elderly and providing free tutoring for households headed by a child bread-winner.
Shinhan Life is implementing the ‘zero defect sales’ throughout the entire process, including the initial stage of selling the product to the final stage of managing the contract. We introduced a system of quality management index to score the ratio of improper sales and the evaluation result of external private institutions so that customers can select products that they genuinely want through proper sales.
We are considerate of the socially disadvantaged.
Shinhan Bank operates the ‘Healing Program for Household Debts’ as its representative activity that is considerate of the socially disadvantaged. It allows customers who find it difficult to get loans under normal terms because of changes in economic conditions, including sudden decrease in income, unemployment and the falling property prices, to adjust their repayment schedule to suit their repayment ability so that they can be financially independent. The Healing Program consists of real estate programs that target credit loan customers. We support customersthrough various programs to help customers get back on their feet.
In order to be considerate of customers with disabilities, ShinhanCard established and operated customized product and service processes. Messaging and consulting services are provided through the homepage, while we are Korea’s only card company to provide sign language consulting services for citizens with a hearing disability. Also, we developed and released the world’s first braille card for the visually impaired.
In the case where a visually impaired customer conducts securities transaction, Shinhan Investment is implementing the policy of giving preferential treatment on commission charges by deducting 50% of the brokerage charge based on the fact that they use the voice-screen ARS service or the counter because the HTS, which is an online securities transaction system with low commission charges, is restricted to them. We provide financial services for Win-Win development, including support for outstanding small and medium-sized companies and new growth engine companies, while also holding the Compassionate Finance Camp that targets middle and high school students by implementing the Compassionate Finance through the activities of talent donation.
Shinhan Life provides discounts on insurance premiums that target the socially neglected, including the low-income households, the disabled and the multi-child families. Also, we operate a system that grants a grace period for paying the insurance premium and repaying the principal and interest for customers who recently become unemployed or go out of business because of others or suffered from disaster damages. Since 2011, we donated a total of KRW 300 million in the company’s name together with 1% of the monthly insurance premium from the children’s insurances for children with cancer. Also, we are carrying out many meaningful programs of compassionate insurance internally and externally, such as giving 10% of the donation amounting to KRW 30 million to the children of low-income customers as medical expenses.
Paving the Way for Shinhan
In 2012, Shinhan Financial Group established the mission of ‘making the world a better place through the strength of finance’. Through this, we included the meaning of Compassionate Finance into the group’s value management system.
For some time, Shinhan Financial Group has been implementing the business to focus on growth and profit, making it deeply rooted in the organization’s system and culture. The management system that focuses on growth and profit can be seen in the evaluation system based on key performance indicators (KPI).
Gaining the trust of our customers and society is an important asset for financial companies. Instead of pursuing management focusing on growth and profits, Shinhan Financial Group will harmoniously connect the two pillars of growth and contribution through the management that gains the heart of customers by concentrating on social trust. Above all, all employees understand that thinking of customers first and achieving the company’s growth together with customer’s benefits is important, we established a scientific performance evaluation system to reflect in evaluating the growth of customer values and the ratio of return.
In this sense, we will do our best to incorporate the Compassionate Finance with the corporate culture. We will examine not only the evaluation system at the group level, but also the evaluation system based on the existing KPIS that covers all affiliates, business units and business scenes. It takes a long time to change the system and way of thinking which is deeply rooted in the organization. However, Shinhan Financial Group believes that this is the path that we should take and we will take it one step at a time.
Implementation plan of Compassionate Finance for major group companies in 2013
| Shinhan Bank |
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| Shinhan Card |
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| Shinhan Investment |
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| Shinhan Life |
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