Shinhan Bank Launches 'Secret Inspection Team' for Incomplete Sales... 126 Members Deployed to 657 Branches

Jin Ok-dong Bank President Reflects Determination: "Do Not Sell Unless Fully Sold Out"
126 External Experts Deployed... Sales Suspended at Branches if 1st and 2nd Phases Are 'Inadequate'

[Asia Economy Reporter Haeyoung Kwon] Shinhan Bank has deployed an 'Undercover Inspection Team' consisting of 126 experts to eradicate incomplete sales at its branches and has launched an investigation into the sales status of investment products at 657 branches nationwide. Branches that receive failing grades are warned with a drastic measure that prohibits them from selling investment products for one month, putting all branches on high alert. This reflects the determination of Shinhan Bank President Jin Ok-dong, who stated, "If it is not a complete sale, it is better not to sell investment products at all."

According to the financial sector on the 24th, Shinhan Bank will complete the first round of mystery shopping (undercover inspection) for incomplete sales by the end of this week. Excluding corporate branches and special institution branches, 126 external professionals disguised as ordinary consumers have been deployed to 657 branches nationwide to investigate incomplete sales and evaluate consumer protection status.

Based on the undercover inspection team's investigation, the results of the first inspection will be announced around mid-March. Branches rated 'Insufficient' or below among the six levels of 'Excellent ? Good ? Average ? Insufficient ? Poor ? Very Poor' will undergo a second round of mystery shopping starting from the end of March. Branches that receive an 'Insufficient' or lower rating in the second round will be selected as final branches subject to sales suspension by the end of April.

According to the 'Investment Product Sales Suspension System,' which Shinhan Bank is the first in the banking sector to introduce, the affected branches will be prohibited from selling investment products for one month, and the responsible employees must undergo retraining on investment product sales procedures and product information.

A Shinhan Bank official said, "This is to further strengthen the protection of customers using investment products such as funds and equity-linked trusts (ELT)," adding, "The system was introduced to emphasize to employees the importance of complying with investment product sales procedures."

Shinhan Bank benchmarked the mystery shopping conducted by the Financial Supervisory Service (FSS) on financial companies and intensified the undercover inspection to the level of regulatory supervision. The undercover inspection team was formed with external professionals who have conducted FSS examinations. It is reported that they are examining compliance with items that the FSS focuses on, including ▲the suitability principle ▲duty to explain ▲recording obligation ▲cooling-off system ▲protection system for elderly investors ▲suitability report system ▲and adherence to guidelines on the sale of unsuitable products.

Shinhan Bank’s drastic measure comes as the trust in the entire banking sector has been shaken by recent incidents such as the overseas interest rate-linked derivative-linked funds (DLF) and Lime Asset Management scandals, which caused significant losses to investors. President Jin previously urged employees at the first half management strategy meeting, saying, "Consumer protection, compliance, and internal control must precede the implementation of sales strategies," and "If it is not a complete sale, it is better not to sell investment products."

As part of consumer protection, the key performance indicators (KPIs) used to evaluate branches have also been significantly revised starting this year. The new KPI system, called the 'Growth Together Evaluation System,' abolished relative evaluation and introduced goal achievement rate evaluation, focusing on assessing whether suitable products are sold to consumers and whether after-sales management is conducted. To prevent incomplete sales, a sales procedure inspection system using artificial intelligence (AI) will also be introduced within the year.

A financial sector official explained, "No bank has escaped the DLF incomplete sales and Lime scandal, making consumer protection the biggest issue in the banking sector this year," adding, "As CEOs pay attention to consumer protection, strong and effective measures such as the KPI system overhaul and the investment product sales suspension system are being implemented."

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