Credit card issuers are grappling to find a new growth engine in a saturated local financial market by mapping out projects to make inroads into foreign countries.
Their movement, however, faces deadlock amid protectionist stances in China and some Southeast Asian countries, officials in the non-banking industry said Thursday.
A Lotte Card official stressed that the credit card business is one of the hardest sectors to expand overseas.
“Major card firms with excellent products and services have failed to advance into the Chinese credit card market despite their efforts over the past few years,” he said.
“The industry has found that China and Vietnam still have strong protectionism for their domestic industries, and hardly let in foreign capital in the credit card sector,” he said.
Officials in the card sector are pinning hopes on the banking industry’s further expansion and enhanced reputation in the overseas market, aiming at synergy between banking and non-banking in foreign markets in the future.
The Lotte official said the overseas expansion of Korean credit card firms tended to follow that of Korean banks.
“At present, only credit card firms affiliated with large banks can afford the huge capital to penetrate foreign credit card markets,” he said.
Meanwhile, Korea Exchange Bank announced on Thursday that it would launch “Global Executive Membership,” a global financial service designed for Korean clients working overseas. The service includes a variety of secondary services including a credit card service, global loan, financial management program and vault rental service.
The Korea Development Bank will open its Abu Dhabi office on Friday, a milestone in entering the Middle Eastern and North African financial market.
The Korea Federation of Banks signed a memorandum of understanding with the Emirates Banks Association chairman, His Excellency Abdul Aziz Abdulla AL-Ghurair, in Dubai of the United Arab Emirates. The pact includes mutual cooperation in supporting the two countries’ banks to enter each other’s markets.
Banks and credit card firms expect that the bank association’s help to initiate building a stable platform with other nations’ counterparts will save time, effort and financial expense in penetrating foreign financial markets.
Korean banks’ overseas expansion is still in the initial stages, while almost two decades have passed since the opening of the first branch. It has been only two to three years since the banks began actively launching overseas branches.
Currently, Woori Bank has 13 branches overseas, and Shinhan Bank has established business networks in 14 countries. The Industrial Bank of Korea has offices in 10 or so countries and Kookmin Bank has expanded its operation to Southeast Asia, including Vietnam, India and Cambodia.
By Chung Joo-won (
joowonc@heraldcorp.com)
