Korea spurs digitization in financial supervision

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By Kim Bo-eun

The Financial Supervisory Service (FSS) said Tuesday it will seek to boost its efficiency in protecting consumers by incorporating innovative technologies such as artificial intelligence (AI).

This refers to supervisory technology or "SupTech." The FSS is accelerating related developments after a SupTech innovation team was created in an organizational reshuffle conducted earlier this year.

The agency said the technology has been applied in two new areas this year ― identifying mis-selling in telemarketing of insurance products and reviewing reports on private equity funds (PEFs).

The former utilizes AI technology for speech-to-text conversion of insurance telemarketing recordings. Based on this process, the FSS will be able determine whether a salesperson falsely promoted products.

Last year, the FSS began using the same technology to identify private money lenders using illegal means to collect loans. This was done by searching for threatening phrases in recordings of phone calls between the lenders and their clients.

Before incorporating the technology, staff members had to listen to all of the recordings to detect irregularities.

The speech-to-text conversion has been able to detect 93.7 percent of irregularities in insurance product telemarketing and 89.5 percent in loan collections by private moneylenders.

The FSS uses AI to assist reviews of PEFs, by utilizing machine reading comprehension technology. According to the agency, the technology has shown a 94.5 percent accuracy rate.

The same technology was introduced last year to analyze and categorize complaints filed with the FSS.

The agency plans to establish a big data base for its system addressing complaints this year.

This will be done through using speech-to-text conversion technology to accumulate data on recordings of complaints filed via the FSS' call center, which receives 510,000 complaints annually.

The service will seek to offer AI-based consulting services, with categorized data on complaint types.

The authority plans on incorporating big data to better monitor illegal advertising of financial products in July.

The FSS said it will create a taskforce for the digitization of supervisory tasks.

“The taskforce, comprised of members of various departments, is set to be launched this month,” an FSS official said.

“The team will be in charge of setting up short-term and long-term tasks in driving the digital transformation of the FSS.”