The AI revolution is transforming the financial industry. While banks once competed based on the number of branches and asset size, the focus has shifted to how effectively they utilize data and integrate AI into their operations. For regional banks, AI is not just an option; it is a matter of survival, as they struggle to compete with large metropolitan banks and internet-only banks.
Kim Sung-joo, president of BNK Busan Bank, has a clear understanding of this reality. Since taking office, he has emphasized regional finance and productive finance while outlining a vision to transform Busan Bank into an 'AI-native bank.' This initiative aims to redesign the bank's operations, customer service, and organizational culture around AI, moving beyond mere application of AI to specific tasks. Kim's experiment is drawing attention in the financial sector as it explores whether regional banks can create new growth models through AI.
Kim's leadership is characterized by a focus on the field. Shortly after his appointment, he visited manufacturing sites in the southeastern region, including shipbuilding, machinery, and marine industries, to listen to the voices of business leaders. He believes that the bank can only grow if the local economy thrives.
This year, Busan Bank has launched a special loan program worth 2 trillion won, named '2026 New Start Special Loan,' to support manufacturing and foundational industries. Additionally, it has introduced a special guarantee loan of 400 billion won for companies with strong technology but insufficient collateral. This expansion of productive finance marks the beginning of Kim's leadership, as he envisions finance as a platform for growing local industries rather than merely a lending service.
Such field-centered management has yielded results. In the first quarter of 2026, Busan Bank reported a net profit of 108.1 billion won, a 26.3% increase compared to the same period last year. It was the only subsidiary of BNK Financial Group to record an increase in net profit, showcasing the strength of regional banks.
Kim recently made a significant statement at the 'AI Leadership Summit,' attended by all executives and department heads of Busan Bank.
"AI is no longer a choice; it has become the new standard in finance," he said.
This statement is not just a slogan; it encapsulates Busan Bank's future strategy. Kim does not view AI as merely an IT department project. He emphasizes that executives must actively consider how to utilize AI in organizational operations and decision-making. Ultimately, he believes that AI innovation is a matter of leadership, not just technology.
Following the AI Leadership Summit, Busan Bank has begun expanding AI training for all employees and enhancing the AI capabilities of its management team. This initiative aims to embed AI into the organizational culture rather than merely implementing it at a superficial level.
Kim's vision for the future goes beyond a simple digital bank. He has declared his intention to transform Busan Bank into an 'AI-native bank.'
An AI-native bank is not merely one that adds AI to existing operations; it signifies an organization where all processes, decision-making, customer service, risk management, and product development are centered around AI. Busan Bank is focusing on key initiatives such as operational innovation using generative AI and AI agents, hyper-personalized financial services, and establishing AI governance.
Particularly noteworthy is the concept of hyper-personalized finance. In the past, banks managed customers by categorizing them into tiers. However, in the AI era, each customer becomes a unique market. By analyzing consumption patterns, financial histories, and asset statuses, it becomes possible to offer tailored services to each individual. Kim believes that through AI, regional banks can provide customer service on par with mega banks.
The most concrete achievement of Kim's leadership at Busan Bank is the introduction of an alternative credit scoring model based on AI.
This year, Busan Bank implemented an AI-based alternative credit scoring model that evaluates customers' repayment abilities by analyzing not only traditional financial transaction data but also various non-financial information through machine learning. This system is significant as it provides more opportunities for young people, self-employed individuals, and small business customers who may lack extensive financial histories.
This is not merely an innovation in assessment; it represents a shift towards data-driven finance, the essence of AI finance.
Historically, regional banks have had relatively limited customer data. However, AI allows for the evaluation of customers using a broader range of data beyond traditional financial information. This technology can turn the weaknesses of regional banks into strengths. Kim aims to reduce financial blind spots and expand inclusive finance through the AI assessment system.
Another notable aspect of Kim's approach is his openness. Busan Bank is collaborating with Kakao Bank on joint loans for small businesses and operates a dedicated section within the Toss app. Instead of competing with internet banks, the bank has chosen a strategy of cooperation.
This reflects an important characteristic of finance in the AI era. In the past, banks sought to do everything independently. However, in the AI era, competition is increasingly about ecosystems where platforms and data are interconnected. Kim is experimenting with a new model that combines Busan Bank's regional network with the digital platforms of big tech companies.
Kim's vision extends beyond Busan Bank to encompass the entire city of Busan. Since being designated a financial hub, Busan has grown around marine finance and derivatives markets. The integration of AI could open new opportunities. Busan Bank is actively participating in nurturing local AI startups and creating a digital financial ecosystem, aiming to establish a virtuous cycle where AI revitalizes the local economy and innovates regional finance.
Ultimately, Kim's dream is not merely about the survival of a regional bank. It is about transforming Busan into an AI financial hub that transcends the capital-centric financial structure of Seoul.
Kim's financial entrepreneurship can be explained through two pillars. One is productive finance, which involves supplying funds to local manufacturing, small businesses, and innovative enterprises to revitalize the local economy. The other is the transition to AI, which entails redesigning the bank's organization, services, and financial models around AI.
While many financial companies view AI as a means to cut costs, Kim sees it as a future growth strategy for regional banks. Although they may not compete with large banks in terms of capital size, he believes they can compete effectively through their ability to leverage AI.
The AI era emphasizes the economy of intelligence over the economy of scale. Kim's challenge ultimately boils down to one question: "Can regional banks grow again through AI?" Busan Bank is currently writing the answer to that question.
* This article has been translated by AI.
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