The Financial Supervisory Service said on the 22nd that it will create a consumer protection oversight institutional sector under the direct control of the governor. To strengthen the response to financial crimes affecting livelihoods, it is preparing to introduce special judicial police while also setting up an organization to share financial crime trends with related agencies such as the police.
The work previously overseen by the Financial Supervisory Service's Dispute Mediation Bureaus 1–3 will be transferred to each industry's supervisory bureaus, and dispute mediation for the insurance institutional sector will move to the Financial Consumer Protection Service. Through this, a single senior deputy governor will handle the entire process for one industry, from product screening and dispute mediation to inspections.
A Bank Risk Supervision Bureau, which monitors banks' funding supply, will also be created. The existing four departments (bureaus) will be augmented with functions such as IT security, the introduction of artificial intelligence (AI) in the financial sector, screening of high-risk financial products, and preparation for a basic law on digital assets.
◇ Creation of five consumer protection oversight bureaus… sharing financial crime trends with police
The newly established consumer protection oversight institutional sector has been given an overarching function over supervisory services, building on the existing consumer protection institutional sector. The consumer protection oversight institutional sector will take charge of reviewing product risks from the product manufacturing and design stages to strengthen the prevention of consumer harm.
The consumer protection oversight institutional sector will consist of five bureaus: the Consumer Protection Supervision Oversight Bureau, the Consumer Harm Prevention Bureau, the Supervision Innovation Bureau, the Consumer Communication Bureau, and the Consumer Rights Protection Bureau. The Consumer Protection Supervision Oversight Bureau will be responsible for consumer protection and for improving regulations and practices related to responses to harms to livelihoods. Through the operation of the Financial Consumer Protection Advisory Committee, it will assess overall supervisory services and set operational directions. The Consumer Harm Prevention Bureau will supervise the product manufacturing, design, and screening stages to strengthen harm prevention. It will also monitor the product sales process (including advertisements and disclosures) and handle tasks such as issuing consumer alerts and supporting product sales suspension orders (Financial Services Commission).
The Supervision Innovation Bureau will oversee supervision of financial company governance, responses to major common issues in the financial industry, and supervision of financial conglomerates. The Consumer Communication Bureau will be newly established by reorganizing the current Financial Civil Complaints Bureau. It will provide complaint services to financial consumers and analyze complaint trends. Based on consumer feedback (including inconvenience reports), it will also pursue institutional (practice) improvements to reduce financial complaints and disputes. The Consumer Rights Protection Bureau will be dedicated to operating the Financial Disputes Mediation Committee and evaluating financial companies' consumer protection practices.
The Financial Supervisory Service is also pushing to introduce special judicial police to eradicate financial crimes affecting livelihoods. It plans to establish a livelihoods special judicial police task force (TF) to prepare legal amendments and operating rules for the special judicial police. At the same time, within the Livelihood Harm Response Oversight Bureau, the Financial Supervisory Service will create a financial crime information analysis team to collect the latest techniques and trends in livelihood crimes and share them with related agencies such as the police and the Financial Services Commission (FSC).
◇ Transferring dispute mediation functions to each industry's supervisory bureaus
The Financial Supervisory Service will transfer the dispute mediation processing function handled by departments under the Financial Consumer Protection Service (Dispute Mediation Bureaus 1–3) to the departments (supervisory bureaus) responsible for products and systems in each industry. The aim is for the deputy governor in charge of each sector to be responsible for the entire process in that sector, from product screening to dispute mediation and inspections.
The insurance institutional sector, which has many dispute complaints, will be transferred to the Financial Consumer Protection Service. The Insurance Actuarial Product Supervision Bureau will be reorganized into the Actuarial Risk Supervision Bureau, which will specialize in actuarial and risk supervision (with the product supervision function transferred). Within the Actuarial Risk Supervision Bureau, an Insurance Actuarial Audit Team will be newly established. The team will manage actuarial assumption operations by each insurer and switch to inspections when violations are found. Within the newly established Insurance Product Disputes Bureau 1, the Insurance Product Audit Team will be separately organized into a life insurance products team and a non-life insurance products team to supervise each industry.
◇ Creating the Bank Risk Supervision Bureau… strengthening security, AI, and fund screening functions
In the banking institutional sector, the Bank Risk Supervision Bureau will be established. A key feature is the integration of funding supervision and soundness supervision functions currently handled by the Bank Supervision Bureau, the Financial Safety Support Bureau, and the Bank Examination Bureau 3. The Bank Risk Supervision Bureau will also work to improve regulations that hinder the supply of funds to productive sectors and to advance banks' risk assessment models for loans to sole proprietors.
A Digital Risk Analysis Team will be created within the Digital Finance Oversight Bureau to bolster the financial security supervision system. The existing Digital Innovation Team will be reorganized into the AI and Digital Innovation Team to promote the adoption and use of AI in the financial sector. Within the Pension Supervision Office, a Pension Innovation Team will be established to support legal revisions for pension system reform and to strengthen the function of securing retirement income, including improving pension returns.
A Special Review Team will be created within the Asset Management Supervision Bureau to screen newly launched high-risk, complex financial investment products. The Special Review Team will be responsible for reviews of business development companies (BDCs), the Public Growth Fund, and overseas alternative investment funds and foreign funds.
Within the Virtual Asset Supervision Bureau, a task force (TF) called the "Digital Asset Basic Act Introduction Preparatory Team" (tentative name) will be set up for phase 2 legislation on virtual assets (the Digital Asset Basic Act). The TF will work on subordinate legislation and check preparedness to ensure the stable implementation of the Digital Asset Basic Act. Two market surveillance units will be added to Investigation Bureau 1 of the disclosures investigation institutional sector. They will strengthen capital market surveillance and quickly connect to planned investigations when social issues are identified.