The Financial Supervisory Service urged small and midsize finance sectors to prepare for developments in the Middle East.
On the 16th, the Financial Supervisory Service (FSS) held the "2026 small and midsize finance institutional sector financial supervision briefing" with about 200 attendees, including executives and employees from savings banks, mutual finance institutions, specialized credit finance companies, payment processing companies (VAN), and related federations and associations. The briefing was arranged to strengthen communication with the small and midsize finance sectors and to share this year's supervisory and inspection direction.
On the day, Assistant Deputy Governor Lee Jin of the FSS institutional sector for small and midsize finance said the sector had faced a difficult business environment in recent years due to a sluggish real estate market, but thanks to the industry's active self-rescue efforts, soundness is gradually recovering. Still, with global economic uncertainty likely to persist due to developments in the Middle East and U.S. tariff policy, Lee emphasized the need for thorough preparation.
In particular, considering that regional economies and low-income groups are struggling due to financial polarization, Lee urged the activation of community-based sales and an expansion of mid-rate loan supply to ensure that necessary funds can be supplied sufficiently and in a timely manner. Lee also asked the sector to establish "sales practices that put consumers first" so that consumers' legitimate rights, such as the right to request interest rate cuts and the right to withdraw loan applications, are guaranteed.
Lee also stressed the need to promptly clear assets with deteriorated soundness, such as nonperforming project financing (PF), and to continue efforts to build sufficient provisions and strengthen capital. At the same time, to prepare for rapid market shifts stemming from developments in the Middle East, Lee called for a thorough emergency response framework so that, if abnormal signs are detected in terms of liquidity and soundness, swift action can be taken.
Lee said it is necessary to tighten internal controls to ensure that financial accidents do not undermine trust across the industry. In particular, Lee emphasized the need for thorough preparation so that the newly introduced duty-of-care frameworks for savings banks and specialized credit finance companies and the measures to strengthen management accountability in mutual finance institutions can operate effectively.
Lee added that, amid a new competitive environment driven by the spread of artificial intelligence (AI) and the platform economy and the institutionalization of stablecoins, it is important to respond quickly to change and secure new growth engines to avoid falling behind.