The Financial Supervisory Service Expands Bank Sector Internal Control Workshops to Twice a Year

[Asia Economy Reporter Song Hwajeong] The Financial Supervisory Service (FSS) will expand the internal control workshops for the banking sector from once a year to twice a year and strengthen communication with the industry.

On the 2nd, the FSS held an internal control workshop for bank holding companies (8 firms) and banks (20 firms). This workshop, held face-to-face for the first time in three years due to COVID-19, was attended by about 100 internal control officers, including 25 compliance officers.

The workshop covered three main topics: ▲ Innovation plans and future promotion schedules for internal control in the banking sector ▲ Internal control response tasks in line with the digitalization of finance ▲ Directions for establishing internal control systems at the financial group level.

During the workshop, the FSS revisited the causes of various incidents and accidents that occurred throughout the year and explained the innovation plans and future schedules for internal control in domestic banks.

First, the FSS decided to expand the internal control workshops for the banking sector from once a year to twice a year to enhance communication with the industry. Additionally, it committed to actively conducting supervision and inspections of internal control to help bank holding companies and banks become more trusted institutions.

Regarding the innovation plans for internal control in domestic banks, the FSS evaluated that "based on active sharing of awareness and cooperation with the banking sector, more bold and concrete improvement plans than ever before have been prepared," and urged continuous interest and efforts at the top management level to ensure that this innovation plan becomes a significant turning point in fostering an internal control culture.

Professor Jeong Junhyuk of Seoul National University Law School, who gave a special lecture on the digitalization of finance and internal control, emphasized, "The digitalization of finance is fundamentally changing the business patterns of financial companies," and added, "Internal control must also timely identify and adapt to risk factors arising from these environmental changes."

Regarding the internal control system at the financial group level, Senior Research Fellow Lee Seongbok of the Korea Capital Market Institute pointed out, "While bank holding companies are strengthening synergy business strategies and operations at the group level, internal control still focuses on individual subsidiaries," and suggested measures to enhance the holding company's internal control oversight function, including establishing a three-lines-of-defense internal control system at the group level and strengthening communication and cooperation among group internal control organizations.