FSS expands consumer protection in reshuffle

The Financial Supervisory Service on Thursday unveiled its reshuffle blueprint, focusing on consumer protection and innovative finance.

The move came amid the ongoing controversy regarding the so-called derivatives-linked fund fiasco -- the improper sales of products by local banks and securities. The FSS is slated to announce its sanction decision for two major banking chiefs later this month.

“To respond to the stronger consumer protection needs and enhance the supervisory functions over high-risk financial products, the FSS has come up with a reorganization plan,” the watchdog said in a release.

The key pillars of the reshuffle are to expand the department in charge of financial consumer protection and to establish a new sector to support the digital transformation of financial supervision, officials said.

The financial consumer protection department, previously aligned in six divisions and 26 teams, will be rearranged into 13 divisions and 40 teams.

While seven divisions will focus on preemptive damage prevention, the other six will take charge of disputes, petitions and related investigations.

With this subdivision of functions, a deputy governor post has been added, bringing the total number of the senior level posts to nine.

Meanwhile, the FSS’ sanctions committee is slated to hold its final meeting on Jan. 31 to decide the penalties for KEB Hana Bank and Woori Bank, as well as their respective chiefs at the time of the disputed DLF sales last year.

The panel earlier delivered a notice to Hana Financial Group Chairman Ham Young-joo and Woori Financial Group Chairman Sohn Tae-seung that they may be handed down “reprimands and warnings” for failing to supervise the internal process.

Other newly established teams in the FSS’ latest reshuffle plan included a “SubTech Innovation” team, in charge of technology-based financial supervisory system, and a “RegTech” team under the IT-Fintech Strategy Department to supervise the IT sectors of financial companies.

In step with the incumbent Moon Jae-in government’s New Southern Policy and also to seek new growth opportunities, the FSS will also initiate a special task force on helping local financial firms expand business in Southeast Asian countries.

By Bae Hyun-jung (tellme@heraldcorp.com)