FSS eyes stronger regulatory ties with ASEAN

By Kim Bo-eun

The Financial Supervisory Service (FSS) is seeking to strengthen cooperation with counterparts in the ASEAN region, amid an increasing number of Korean banks and brokerages doing business there.

"We will continue to seek cooperation with our regional counterparts,” FSS First Senior Deputy Governor Yoo Kwang-yeol said at a meeting with domestic finance companies that are operating overseas branches in the region, at the Conrad Hotel in Seoul, Friday.

Yoo said the FSS plans to hold regular bilateral and multilateral meetings with regional regulatory bodies.

The meeting was held to enable the companies to share their business strategies and for the FSS to notify the businesses about the regulatory policies of ASEAN countries.

FSS officials and officials of the financial firms discussed the need to establish a government entity to support existing Korean businesses operating in ASEAN countries as well as those wishing to enter the market.

To help local firms make inroads in the region, the FSS said it plans to make inspections on domestic finance companies' overseas branches more efficient _ by skipping unnecessary inspections for businesses complying with regulations and focus on those that are not.

Yoo said the FSS will seek to arrange training opportunities for their ASEAN counterparts stating that “supervisory authorities in Indonesia and Vietnam showed a great interest in fintech, virtual currency and in preventing cybercrimes.”

Meanwhile, he asked Korean businesses to focus on localization.

"Businesses need to provide services that are helpful for local customers, and need to hire local personnel, as long-term partners of the countries they are based in," he said.

At the same time, the FSS asked for the businesses to adhere to local regulations and create internal control systems at overseas branches to prevent financial accidents.

The FSS currently acts as an agent between Korean businesses overseas and their counterparts in the respective countries.

The FSS conveys Korean business' difficulties and suggestions on doing business in the respective countries to local regulatory bodies. It provides information that regional counterparts ask for, and notifies Korean businesses about foreign financial markets and supervisory regulations.

Korean banks, securities firms, asset management companies and insurers have increased their presence in nine out of 10 ASEAN member states.

Vietnam has the largest number of Korean finance companies with 52, followed by Indonesia with 25 and Myanmar with 21, as of December 2018.

Amid increasing expansion, the FSS has held close consultations with regional counterparts, on matters including opening branches, getting approval for financial products, regulations on sales practices and unfair competition in the market.

Last November, the FSS met with the Bank of Thailand and in December with Bank Negara Malaysia and Malaysia's Securities Commission.

In March, the FSS met with Cambodia's Ministry of Economy and Finance, Indonesia's Financial Services Authority as well as the State Bank of Vietnam and Vietnam's Ministry of Finance.