How did access to diverse communities help Shinhan Bank tap into a new market?

A pioneer in South Korean finance with operations all over the world, Shinhan Bank is committed to ongoing global expansion. When it decided to enter the Canadian market, Shinhan Bank chose Ontario's Greater Toronto Area (GTA) because of its cultural diversity and educated, skilled workforce.

The Challenge

Shinhan Bank's goal is to become a leading, customer-oriented bank with a global footprint. To successfully establish itself in Canada, Shinhan Bank needed access to the right market, an educated and skilled workforce, a stable economy and proximity to a thriving financial services sector.

Background

Shinhan Bank established its first branch in South Korea in 1897 and opened its first overseas branch in 1918. Its global network now includes operations in Canada, the U.S., U.K., Europe, Japan, China, Hong Kong, Singapore, Vietnam, India, Cambodia, Central Asia, Southeast Asia and Mexico. Shinhan Bank is the main subsidiary of Shinhan Financial Group, which had total assets of KRW (South Korean Won) 323 trillion as of June 30, 2014.

Rated the #1 bank in South Korea and 43rd worldwide in 2014 by The Banker, Shinhan Bank is also ranked #30 on the Global 100 Index, a ranking of the world's most sustainable corporations.

As it considered expanding to Canada, Shinhan Bank knew it needed to reach Korean-Canadian customers and have the potential to expand its offerings to other ethnic communities. A stable economy, strong financial services sector and a skilled, well-educated workforce were also critical.

The Solution

Shinhan Bank Canada opened both its head office and main branch in North York, Ontario in 2009. Less than two years later, it opened a branch in Mississauga, and in 2014 it opened a branch in Thornhill. The Bank, which employs 53 people and serves the Korean-Canadian and other ethnic communities, offers a full range of personal and business banking services, including chequing and savings accounts, investing, loans and mortgages and wire transfers. As of September 2014, Shinhan Bank Canada had accumulated $397 million in assets.

Building on its success to date, Shinhan Bank Canada is planning future growth. "There are abundant opportunities in Ontario," says Mr. Park. "We intend to expand further in the next few years."

Image depicting business storefronts on a street in North York, Ontario.
Shinhan Bank Canada, which opened its main branch in North York in 2009, offers a full range of personal and banking services. Photo credit: Shinhan Bank Canada.

Why Ontario?

Culturally diverse communities

With more than 60,000 Korean-speaking residents, most of them in the Toronto area, Ontario was the ideal choice for Shinhan Bank's Canadian operations. "Ontario has the largest Korean-Canadian population in Canada," says Mr. Park. "We saw an opportunity to serve the Korean-Canadian market."

Ontario's culturally diverse population quickly opened up additional opportunities for Shinhan Bank Canada. "We want to serve the non-Korean community as well," says Mr. Park. "So we have gone beyond that community to serve Vietnamese, Chinese and Filipino customers. And one of the reasons we expanded to Thornhill was to serve its Asian and Persian communities."

Ontario's cultural and linguistic diversity is a draw for many international businesses. More than one in four Ontario residents were born outside Canada. Each year the province welcomes more than 100,000 newcomers – almost half of all Canada's immigrants. More than two million of Ontario's 12 million people fluently speak a language other than English or French. In fact, over 200 languages are spoken in Ontario including Korean, Vietnamese, Tagalog, German, Portuguese, Spanish and Italian. In addition, a significant portion of the population is fluent in the major Chinese languages as well as those of India.

A skilled, dynamic workforce

Image of a large office building occupied by Shinhan Bank Canada on the ground floor in Thornhill, Ontario.
With more than 60,000 Korean-speaking residents, Ontario was the ideal choice for Shinhan Bank, which opened a branch in Thornhill in 2014 to serve its Asian and Persian communities. Photo credit: Shinhan Bank Canada.

"There's no question that Ontario's skilled and educated workforce was the second-most important factor in our decision to come here," says Mr. Park.

Ontario has a large and growing base of skilled financial services workers with expertise, creativity and energy. Its financial services workforce includes more than 8,000 Chartered Financial Analysts, more than 9,000 Certified Financial Planners and more than 81,000 Chartered Professional Accountants.

The province's 44 universities and colleges, including 14 MBA programs, also produce a steady supply of top talent. Ontario has four of the top 15 international business schools, producing more than 40,000 business graduates annually. The provincial government and the Toronto Financial Services Alliance have also established a Centre of Excellence to enhance the quality and diversity of financial services education in Ontario.

The banking industry is a major employer in Toronto, representing almost half of total employment within the city's financial sector.

A thriving financial services sector

Toronto, Ontario is the financial capital of Canada and a leading international financial centre. The UK-based The Banker ranks Toronto 6th among the world's top financial centres; in North America it is second only to New York.

Of the 50 foreign-based banks operating in Canada, 41 have located their Canadian head offices in the Toronto region.

Ontario's financial services sector is strongly supported by high-performing information technology (IT) companies. Toronto is North America's third-largest IT cluster.

"Proximity to other financial services was important to us," said Mr. Park. "For example, we have a close relationship with BMO, which is the clearing centre for our cheque transactions."

Canada and Ontario have advanced, transparent and internationally respected financial and regulatory systems, which create an attractive banking environment. For seven straight years, the World Economic Forum has identified Canada's banking system, centred in Ontario, as the soundest in the world.

A strong and stable economy

Businesses that locate in Ontario can maximize profit and minimize risk in an environment of economic, political and regulatory stability. Ontario's economy continues to grow, in spite of the challenging global economic environment. Major indicators, including real GDP, employment, exports, household income and consumption, have posted strong gains since the recession.

"This is a great place to do business," says Mr. Park. "It is a very diverse population, meaning you need to customize your products and services to meet different customer needs. It is challenging, but in today's market you need to be creative and have new ideas. Ontario is a great place to do that."

Image representing an upward view of large office towers in Toronto, Ontario’s financial district.
In The Banker's annual assessment of the world’s top international financial centres, Toronto, Ontario was ranked 2nd in North America and 6th in the world.

Sector/subsector: 

January 20, 2015

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