Financial Supervisory Service "Financial Consumer Protection Governance Meeting with All Financial Sectors"
Governor Lee Chanjin Meets with Financial Sector CEOs
Reiterates Emphasis on Financial Consumer Protection
On the afternoon of the 9th, Lee Chanjin, Governor of the Financial Supervisory Service, held a 'Financial Consumer Protection Governance Meeting among All Financial Sectors' with the top executives of major domestic financial companies at the Financial Supervisory Service in Yeouido, Seoul. Photo by Financial Supervisory Service
Lee Chanjin, Governor of the Financial Supervisory Service, met with CEOs from the financial sector and once again emphasized that strengthening financial consumer protection is the most urgent task facing the industry.
Financial Supervisory Service Governor Stresses Consumer Protection in Meeting with Financial Sector CEOs
On the afternoon of September 9 in Yeouido, Seoul, Governor Lee held a 'Financial Consumer Protection Governance Meeting among All Financial Sectors' with top executives from major domestic financial companies at the Financial Supervisory Service. He stated, "The new administration is making financial consumer protection a core priority," and added, "The Financial Supervisory Service is also fundamentally transforming its work philosophy and approach to focus on consumer protection."
The meeting was attended by representatives from 19 major financial companies, including the heads of the five largest commercial banks, as well as leading insurance and securities firms. According to the Financial Supervisory Service, this was the first time since taking office that the Governor convened a cross-industry meeting focused on financial consumer protection.
Governor Lee pointed out, "As revealed in the recent Hong Kong ELS (Equity-Linked Securities) incident, some areas still suffer from unhealthy management practices focused on short-term performance and inadequate internal controls." He argued, "Due to these chronic issues, consumer harm continues to recur, and the actual implementation of consumer-centric operations remains insufficient, making improvements necessary."
He continued, "We must radically strengthen financial consumer protection governance to establish a management culture centered on consumer protection. Rather than simply responding after the fact, it is essential to build a proactive prevention system, with consumer protection governance at its core." He added, "If consumer protection governance is significantly enhanced, it will reduce risks, increase trust, and ultimately lead to stable growth and profits for financial companies."
Lee Chanjin, Governor of the Financial Supervisory Service (center), held a 'Financial Consumer Protection Governance Inter-Financial Sector Meeting' with top executives of major domestic financial companies on the afternoon of the 9th at the Financial Supervisory Service in Yeouido, Seoul. Photo by Financial Supervisory Service
Best Practices for Financial Consumer Protection Governance Also Released
Governor Lee also urged thorough implementation of best practices for consumer protection governance and called for active involvement from top management. On this day, the Financial Supervisory Service requested that financial companies adopt best practices such as operating effective internal consumer protection committees, ensuring the independence and expertise of the Chief Consumer Officer (CCO) and consumer protection departments, designing and evaluating performance-based compensation systems (KPIs) centered on consumer protection, and clarifying the role of holding companies in consumer protection.
According to these best practices, the internal consumer protection committee must be chaired by the CEO and held as a face-to-face meeting at least once every six months. The consumer protection department is required to manage follow-up actions on committee decisions through an electronic system. The term of the CCO must be guaranteed for at least two years, and to ensure fair work, holding conflicting positions is prohibited.
Additionally, when designing KPIs, indicators related to consumer protection must take precedence over short-term business performance. The guidelines also require that consumer protection indicators, such as complaint occurrences and penalties for incomplete sales, be reflected, and that the differentiation of consumer protection indicators be strengthened.
Governor Lee said, "Due to the lack of interest from top management and a focus on profit-driven management, financial companies have failed to adequately implement internal controls for consumer protection." He called on top management and boards of directors to take the lead so that a consumer protection-centered organizational culture can take root through best practices.
He also asked financial companies to ensure that consumers can receive prompt and fair protection in relation to complaints and disputes. "Due to ongoing business competition among financial companies, the number of complaints and disputes submitted to the Financial Supervisory Service has been increasing every year," he said. "Although the Financial Supervisory Service has implemented various measures and devoted significant resources to handling the growing number of complaints, there are limits to what the supervisory authority can achieve alone," he added, urging companies to focus on prevention.
He further emphasized, "We must strengthen our ability to respond to financial crimes that threaten people's lives, such as voice phishing. Please thoroughly establish a proactive prevention system capable of quickly detecting and blocking crimes against people's livelihoods, such as by advancing abnormal transaction detection systems and enhancing voice phishing screening."
Meanwhile, after the meeting, Kim Miyoung, Director of the Financial Consumer Protection Bureau at the Financial Supervisory Service, told reporters, "Today's meeting was an opportunity for us to explain the intent and best practices for financial consumer protection, share outstanding examples, and exchange views." She added, "There was a consensus that the interest and commitment of the top executives of financial companies are crucial for consumer protection governance."
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