A Financial Supervisory Service survey found that an organizational culture centered on consumer protection is spreading quickly across the financial sector.
The Financial Supervisory Service said on the 22nd that, after reviewing the implementation status of the "best practices for financial consumer protection governance" at 77 financial companies as of late January, most firms had built related systems and were pushing changes across their organizations.
The best practices lay out a desirable governance framework that financial companies should pursue and were announced by the FSS last September. Key points include: ▲ substantive operation of the consumer protection internal control committee ▲ securing the independence of the chief consumer officer (CCO) and the dedicated department ▲ designing and evaluating key performance indicators (KPI) centered on consumer protection.
According to the FSS review, financial companies have moved to improve overall governance by strengthening a board-centered decision-making structure for consumer protection and overhauling internal controls in line with the best practices.
In particular, after the best practices were introduced, the number of companies where the board directly receives reports on consumer protection-related management strategies and policies rose from 55 to 69. The number of companies operating subcommittees on consumer protection within the board also increased from 2 to 15.
The operation of the consumer protection internal control committee also improved. Eleven financial firms shortened the meeting cycle from semiannual to quarterly, and 73 reported major resolutions to the board, enhancing the committee's effectiveness. Performance compensation systems changed as well. Sixty-nine financial companies reflected consumer protection indicators in the CEO's KPI, and 57 reported KPI appropriateness assessments to the board.
The authority of the executive in charge of consumer protection (CCO) also expanded. Sixty-four financial companies granted the CCO pre-approval rights and the right to request improvements on key matters such as KPI design. Fifty-one companies guaranteed a term of at least two years. As related staffing also grew, the share of personnel in consumer protection departments rose from 1.65% on Jan. 2025 to 1.87% on Jan. this year.
The FSS said, "Most financial companies are establishing consumer protection governance in line with these best practices," adding, "We will actively encourage effective operation of companies' governance systems through future financial consumer protection evaluations."