On November 13, Lee Chanjin, Governor of the Financial Supervisory Service, announced plans to strengthen a preemptive consumer protection system throughout the entire process from the design to the sale of financial products, and to shift financial supervision toward a consumer protection-oriented approach.
Governor Lee made these remarks at the "First Financial Consumer Protection Forum" held at the Financial Supervisory Service in Yeouido that afternoon. He stated, "For financial companies, consumer protection is not a short-term cost but a long-term investment for building trust and growth." The forum, co-hosted with National Assembly members Kim Seungwon and Kim Hyunjung, was conducted under the theme "Enhancing the Effectiveness of Consumer Protection in the Development and Sale of Financial Investment Products."
Governor Lee first pointed out, "The case of the incomplete sale of Hong Kong H Index-linked ELS, which resulted in losses amounting to several trillion won, clearly revealed problems in the consumer protection system, such as push-driven sales behavior for short-term business performance, insufficient internal controls, and inadequate risk management systems." He added, "Recently, similar types of consumer damage have occurred in some overseas real estate funds as well."
He emphasized, "These cases of consumer harm suggest the need to examine whether financial companies have sufficiently reflected the potential for losses due to changing circumstances in the process from product structuring to sales, and whether they have explained these risks in a way that is easy for consumers to understand." He announced plans to pursue improvements in the financial product design stage, the sales stage, and in the accountability of both manufacturers and sellers.
Accordingly, Governor Lee stated, "First, we must establish preemptive consumer protection measures at the financial product design stage." He requested, "Financial companies should build internal control procedures to thoroughly review, from the early stages of product development, what risks are inherent in the product and which consumers the product is suitable for."
Second, he stressed, "At the sales stage, companies must fulfill their duty to provide explanations that match the consumer's level of understanding." He emphasized, "Sellers must recognize the risks of financial products from the consumer's perspective and explain them in a way that matches the consumer's level, so that consumers can fully understand important matters such as product risks when making transactions."
Lastly, he called for strengthening the accountability of both financial product manufacturers and sellers. "In particular, manufacturers must ensure that sellers have a clear understanding of the product structure and risks by providing sufficient information, and sellers must thoroughly verify the manufacturer's management capabilities and the risks of the product before selecting products for sale," he said. He added, "The sustainable development of the financial industry is only possible on the foundation of consumer trust," and pledged to faithfully reflect the discussions from the forum in supervisory work.
The forum was attended by co-hosts Kim Seungwon and Kim Hyunjung, Seo Yuseok, Chairman of the Korea Financial Investment Association, as well as representatives from civic and consumer groups, academia, the legal community, and financial companies, who participated as expert panelists. The head of the Belgium Fund Victims Countermeasures Committee also participated as a panelist to convey consumer perspectives.
In his congratulatory remarks, Assemblyman Kim Seungwon recalled his experience as a former bankruptcy court judge, where he witnessed the desperate reality of financial victims firsthand, and stressed, "The focus of finance should be on people, not money." He called for a shift to a "preemptive, prevention-focused financial consumer protection system" and for supervisory authorities to adopt a consumer-centered approach. Assemblywoman Kim Hyunjung also expressed the need for "preemptive, prevention-focused responses" rather than stopgap measures after incidents, and indicated her intention to provide legislative and policy support for the matters discussed at the forum.
Meanwhile, following the first forum on financial products held on this day, the Financial Consumer Protection Forum is scheduled to hold its second session on insurance products on November 18, and its third session on the prevention and relief of financial crimes that harm people's livelihoods on November 27.
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