Despite Restructuring Winds, Banks Are Expanding 'Consumer Protection' Significantly

Establishing New Organization, Independently Deploying and Strengthening Functions
Burden Increases Amid Worsening Management Conditions but Unavoidable

[Asia Economy Reporter Kim Hyo-jin] The consumer protection functions of major banks are becoming a "restructuring safe zone." Despite the sweeping closures of branches and workforce reductions, related work organizations are continuously being newly established. As organizations increase, the demand for dedicated executive positions and operational staff also rises, seemingly increasing management burdens. This is interpreted as a result of heightened public opinion on consumer rights protection and stronger pressure from financial authorities following major financial accidents such as the Derivative Linked Fund (DLF) and Lime Asset Management incidents.

According to the financial sector on the 8th, the five major commercial banks?KB Kookmin, Shinhan, KEB Hana, Woori, and NH Nonghyup?have consecutively established or plan to establish consumer protection organizations during organizational restructuring at the end of last year and early this year. In the case of KEB Hana Bank, which is currently under regulatory sanctions due to the DLF incident, the recent organizational restructuring separated and strengthened the Consumer Happiness Group and the Consumer Protection Headquarters, which were previously held concurrently.

Accordingly, the Consumer Happiness Group was elevated to the Consumer Protection Group, and the Consumer Protection Headquarters was independently placed as the Customer Happiness Headquarters. KEB Hana Bank also established the Investment Product Service (IPS) Headquarters, under which the Investment Strategy Department, IPS Department, and Customer Investment Analysis Center were placed to enhance product expertise and monitoring functions. Similarly, Woori Bank, also under regulatory sanctions, plans to unify the Asset Management Group and Pension Trust Group into a single asset management organization to increase expertise and separate product and marketing organizations to strengthen risk management functions in the upcoming organizational restructuring following the appointment of a new president.

KB Kookmin Bank created a 'Financial Fraud Response Team' consisting of 24 members in the organizational restructuring in the second half of last year. Along with this, it formed a 'Bank-wide Consumer Protection Enhancement and Reduction of Fake Account Task Force (TFT).' Shinhan Bank also established a Consumer Protection Group to oversee customer protection tasks and created a Consumer Support Department dedicated to handling customer complaints. NH Nonghyup Bank decided to appoint a Chief Consumer Officer (CCO) starting this year.

This movement contrasts with the recent accelerating trend of restructuring. These major banks have been consolidating branches nationwide since the end of last year. Up to nearly 100 branches are expected to close by February this year. Additionally, various forms of voluntary retirement procedures have been underway since the end of last year, with around 1,000 employees expected to leave the banks by early this year. This is due to worsening management environments caused by various government regulations such as loan restrictions and the expanding foundation of digital-based non-face-to-face marketing.

An official from the financial sector said, "For banks where management efficiency is an urgent task, establishing large organizations and expanding personnel may be a reluctant necessity," adding, "The government's policy direction is consumer-centered, and there is a self-inflicted aspect due to successive sales accidents. Authorities are also demanding improvements in consumer-related functions in various ways, making this situation unavoidable."

This content was produced with the assistance of AI translation services.