The financial authorities are speeding up preparations for a plan to require financial companies to appoint a chief inclusion finance officer (CIFO). The financial authorities are defining the specific roles and responsibilities of the CIFO while discussing the preemptive introduction of the system with major financial holding companies.
On the 25th, according to the financial sector, the financial authorities are fleshing out the plan to introduce the CIFO through the Inclusive Finance Strategy Task Force. The supervision subcommittee within the task force plans to hear financial companies' views to define the CIFO's specific roles and scope of responsibility. They are also reviewing ways to reflect the CIFO in internal controls and link it with the comprehensive assessment of inclusive finance.
A CIFO is the top officer dedicated to inclusive finance at a financial company. Financial holding companies already have executives in charge of consumer protection and win-win finance, but the financial authorities plan to require them to appoint, separately, an executive solely dedicated to inclusive finance. The aim is to push inclusive finance as an ongoing business, not a one-off. Financial Services Commission (FSC) Chair Lee Eog-weon raised the CIFO introduction plan at a press briefing in May, elevating it to a key task for the task force.
It is reported that the financial authorities are also discussing a plan to consider introducing the CIFO at major financial holding companies even before the system is finalized. Hana Financial Group(086790) on the 5th appointed Vice Chair Lee Seung-yeol as CIFO, the first in the financial sector. Other holding companies are also considering creating the CIFO position.
Some financial holding companies are cautious about adopting the system because the CIFO's role and scope of responsibility have not been finalized. They say inclusive finance overlaps heavily with existing functions such as financial consumer protection, environmental, social and governance (ESG), and win-win finance, making it burdensome to create a new executive position and organization.
An official at a financial holding company said, "We did receive a request to review the introduction of a CIFO from the financial authorities, but no concrete implementation plan has emerged," and added, "Some level of government guidelines needs to come out before we can consider organizational restructuring."