FSS bolsters consumer protection department

Financial Supervisory Service Governor Yoon Suk-heun speaks during a briefing on the agency's restructuring at the FSS headquarters on Yeouido, Seoul, Thursday. / Korea Times file

By Kim Bo-eun

The Financial Supervisory Service (FSS) said Thursday it will beef up its consumer protection department, doubling the number of affiliated divisions. The restructuring is seen as taking into account financial authorities' alarm over losses incurred by investors in derivative options last year and growing concerns over the option-based funds managed by Lime Asset Management.

FSS Governor Yoon Suk-heun said after the reorganization, the consumer protection department will increase from six divisions and 26 teams to 13 divisions and 40 teams. This will take place after the agency's personnel reshuffle is completed.

"We are bolstering the consumer protection department to boost supervision for the design and sales process of high-risk financial products," Yoon told reporters at a briefing at the agency.

Half of the department will be in charge of efforts preventing financial losses for consumers and the other half in dealing with cases that occur.

The former half will review the terms of investment options, as well as look into sales channels. The tasks were originally assumed by each department in charge of banks, brokerages or insurers.

The latter half will set up a new center for financial consumer complaints aimed at speeding up processing the filed cases.

Each section will have a deputy governor in charge.

The FSS said it has benchmarked the U.K.'s Financial Ombudsman Service for its changes.

The consumer protection department will be able to take part in inspections of financial firms with related departments in charge of banks or brokerages. The department will also be able to discuss sanctions for serious cases.

The FSS will have 356 employees in its consumer protection division, up from 278, and seeks to further increase.

The agency said it will create a "SupTech" innovation team as part of its drive for digitization. SupTech stands for supervisory technology and refers to the use of innovative technology such as artificial intelligence (AI) and machine learning by supervisory agencies to support supervision.

The FSS will also integrate its international cooperation and financial hub departments to enhance efficiency. A new team will be set up under the international department that will help local financial firms' expansion in Southeast Asia.