The Financial Supervisory Service said on the 18th that in its assessment of financial consumer protection practices, among 29 companies, two received a "good" rating, 19 received an "average" rating, and eight received a "poor" rating. No company received an "excellent" or "weak" rating.
The assessment items were divided into quantitative and non-quantitative sections. The quantitative section focuses on efforts to handle complaints, litigation matters, and general and electronic financial accidents, and accounts for 30% of the total. The non-quantitative section consists of six items: establishment and operation of an internal control system, procedures for product development, sales, and post-management, performance compensation systems and employee training, provision of consumer information, and protection of vulnerable groups, and its weighting is 70%. In particular, this year the focus was on governance, including the authority and staffing of the chief consumer officer (CCO), whether the consumer protection internal control committee operates substantively, and the design of KPIs related to consumer protection.
Lina Life Insurance and Hyundai Card, which received a "good" rating, performed relatively well in the quantitative assessment and generally received positive evaluations in governance and product sales-related assessments. Lina Life Insurance secured expertise and independence by appointing a CCO with more than 10 years of experience in consumer protection and guaranteeing a three-year term, and it was positively evaluated for effectively operating an early warning system for misselling. Hyundai Card established a companywide consumer protection management strategy and received high marks for appropriately implementing follow-up measures such as training and on-site inspections when warning signs occur through a complete sales monitoring system for solicitors.
By contrast, among the eight companies that received a "poor" rating, Hana Capital and Toss Bank were first-time evaluation targets and were found lacking across the board in both the quantitative section, including increased complaints, and the non-quantitative section, including operation of the consumer protection internal control system and the performance compensation system. Hana Capital saw a surge in complaints and a large-scale financial accident during aggressive factoring sales in 2022–2023, and was criticized for insufficient focus on consumer protection capabilities, such as the CCO concurrently serving as the chief privacy officer. Toss Bank saw a sharp increase in complaints related to delayed processing of overseas debit card purchase cancellations, and was assessed as generally lacking in areas such as staffing for consumer protection, the effectiveness of the prior consultation system, and the design of employee performance evaluations.
In addition, six companies — Lotte Card, Shinhan Bank, Daishin Securities Co., Samsung Securities, Yuanta Securities Korea, and NH Investment & Securities — were "average" in their assessment results but received a final "poor" rating after a downward adjustment of the overall grade due to reasons that caused public controversy, such as personal data breaches or large-scale consumer harm related to equity-linked securities (ELS). Under the detailed enforcement rules of the supervisory regulations on financial consumer protection, if public controversy arises due to sanctions by institutions related to consumer protection or misselling, the overall grade in the practices assessment may be adjusted downward.
By section, in the quantitative section, 21 companies received a rating of "good" or higher, accounting for 72.4% of the total. In items related to complaints and litigation, most financial companies received "average" or higher, but companies with numerous cases of embezzlement, breach of trust, fraud loans, and electronic financial accidents received low evaluations in the general and electronic financial accidents item.
In the non-quantitative section, many companies had basic internal control systems in place, but numerous cases were found to be lacking in the actual functioning of internal controls and in performance evaluation and training. In particular, insufficient dedicated staffing for consumer protection, the internal control committee operating in a perfunctory manner, and poorly designed KPIs from a consumer protection perspective were cited as problems.
The Financial Supervisory Service will notify financial companies and financial associations of the results of this assessment of practices and have each financial company disclose the results on its own website. For financial companies that received a "poor" rating in any assessment item, it will receive improvement plans and check their implementation, and for companies with an overall "poor" rating, it plans to conduct management interviews. It also plans to hold a briefing session in the first quarter of next year to share exemplary and poor cases from the assessment of practices.