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