South Korean electronics giant, Samsung Electronics, has been known for some time as a business interested in venturing into the financial services. Samsung is the current market leader in Android smartphones but has significant interests in other electronics products plus a whole range of devices from refrigerators to ships. When Samsung joins an industry, it has every intention of being a market leader. The business already approaches the financial services with some of its current practices, such as running an upgrade service for customers wanting to buy the latest Android device and of course, the mobile payment system, Samsung Pay. In a broad sense, financial services is seen as a growing consumer industry. Samsung stressed to the group’s subsidiaries the importance of asset management and “fintech” (financial technology) in recent meetings. Recent news reports from sources close to the business report that vice chairman Lee Jae-yong has already met with the senior management of two of South Korea’s largest financial services companies and has at least a further two meetings to come before the end of the month.
This year, Lee Jae-yong has met with Han Dong-woo, the chairman of the Shinhan Financial Group. He has also met with Lee Kwang-goo, the Woori Bank Chief Executive Officer. An industry insider is quoted as saying, “He is scheduled to meet with KB Financial Group chairman Yoon Jong-kyu and Hana Financial Group chairman Kim Jeong-tae before the end of this month.” In addition to these local businesses and stemming from the desire to promote Samsung Pay across the world, Lee Jaw-yong has also discussed cooperation with a large number of global financial businesses such as Citi Group, Union Pay and many Chinese and North American credit card or consumer payment companies.
Currently, it appears that Samsung Electronics are holding meetings in order to take advice from the world’s existing financial services. It is possible that these meetings are simply and only designed to help make Samsung Pay perform: this is very much a focus of the company for 2016 and brings Samsung into competition with a large number of businesses, many of which have been operating in the consumer payment industry for decades. Nevertheless, Apple started their disruption of the cell ‘phone market with the launch of the original iPhone, which within a couple of years became one of the best sellers. It is also possible that Samsung are setting themselves up to offer additional financial products and services and are seeking partners to form alliances with. For those existing financial services businesses, it might be a case of working with Samsung today rather than competing with Samsung in a couple of years time.