The Financial Supervisory Service and the banking sector announced on the 3rd that they have devised measures to promote "compliance reporting" to create a system and organizational culture where illegal and improper activities can be reported.
The FSS and the banking sector have decided to expand the subjects of compliance reporting from current employees of financial institutions to former employees and outsiders. The reporting targets will also increase from the illegal and improper directives of superiors to the illegal and improper directives or demands from all employees.
Previously, when financial incidents involving amounts over 300 million won occurred, financial institutions were required to investigate whether employees complied with reporting guidelines in accordance with related supervisory regulations. Now, in cases of crimes such as embezzlement, fraud, and breach of trust, financial institutions must investigate whether employees comply with reporting requirements.
Measures for the protection of whistleblowers will also be established. To prevent disadvantages for whistleblowers, types of disadvantageous actions will be specified. If any subsequent actions are taken against the whistleblower after reporting, the person taking the action will bear the burden of proof that the action is not disadvantageous.
Plans to promote reporting were also made public. Even individuals involved in improper activities can be exempted from disciplinary actions or receive reduced penalties if they report early. The limit for rewards given to whistleblowers will increase, and a minimum level will also be established.
The FSS recently uncovered that multiple employees were complicit in the improper lending case involving hundreds of millions of won at IBK Industrial Bank and Woori Bank. The FSS has determined that the role of internal whistleblowers is crucial for early detection of financial incidents and preventing the spread of damages, leading to the establishment of these measures.
The Banking Association plans to incorporate measures to promote compliance reporting into the guidelines for preventing financial incidents later this month. Individual banks are set to revise related internal regulations by the first half of this year and implement them starting in July. The FSS will regularly check and supplement the operating status of banks' compliance reporting systems to ensure that this system is smoothly established and operating.