"Financial Sector Must Actively Respond to Population Structure, Climate Change, and Technological Innovation"

Need for Financial Policy Direction According to Population Changes
Emphasis on Policy Financial Institutions' Role in Responding to Climate Crisis
"Technological Innovation Requires Speed Adjustment"

The seminar "Financial Changes Brought by Future Mega Trends," hosted by the Korea Institute of Finance and sponsored by the Financial Services Commission, was held on the 8th at the Bankers' Hall in Myeongdong, Seoul. Kim So-young, Vice Chairman of the Financial Services Commission, is delivering the keynote speech. Photo by Heo Young-han younghan@

The financial authorities held a seminar to discuss response measures in anticipation of significant changes in the financial environment due to demographic shifts, climate change, and technological innovation.

The Financial Services Commission and the Korea Institute of Finance held a ‘Future Finance Seminar’ on the 8th at the Bankers’ Hall in Jung-gu, Seoul, discussing the topic ‘Financial Changes Brought by Future Mega Trends’ with experts from various fields. The seminar focused on the impact of demographic changes, climate change, and technological innovation on the financial market and the financial industry's response strategies.

The first session discussed demographic changes. Jeongho Seo, Senior Research Fellow at the Korea Institute of Finance, who presented on ‘The Impact of Demographic Changes on the Financial Sector,’ explained using Japan’s case that aging population and low birth rates change the composition and behavior of financial market participants. He predicted that labor supply would decrease, savings and investment would shrink, leading to a decline in economic growth rates. For the banking industry, he foresaw changes in funding structures, narrowing net interest margins, and reduced opportunities for fund management. He proposed financial policy directions tailored to mitigating low birth rates and addressing the elderly population.

Jungho Park, Partner at McKinsey & Company, emphasized that the financial industry must fulfill a social role supporting economic growth in response to demographic changes. He also suggested developing and introducing innovative financial solutions considering Korea’s demographic characteristics such as aging, increasing single-person households, and wealth transfer.

The second session continued with discussions on the climate crisis. Oksu Lee, Partner at Deloitte, explained that the role of finance in the era of the climate crisis is to be a source of funding that promotes the transition to low-carbon industries. Specifically, he stressed the need to support green activities and transition activities aimed at carbon reduction and to reduce or stop funding for carbon-emitting activities. He particularly emphasized the role of policy finance. He said, “In situations where profitability from carbon reduction is not guaranteed, policy finance should establish standards and provide support for transition activities that are in the blind spots of financial support due to greenwashing issues.”

Seungjun Lee, Head of the ESG Research Center at the Korea Insurance Research Institute, also stated that in Korea, where manufacturing has a high proportion, transition finance can promote low-carbon transition. He added that financial institutions’ responses to climate change should be institutionally supported through improvements in climate finance disclosure systems and climate-related regulations.

The third session discussed the changing financial industry due to technological innovation. Hyoseop Lee, Director at the Korea Capital Market Institute, explained that while technological innovation has accelerated and expanded the role of the financial industry, it can also threaten financial stability and spread harm to financial consumers. He emphasized the need for a paradigm shift in regulation and supervision and the establishment of a regulatory framework to respond to the acceleration of technological innovation. Youngho Park, Partner at BCG, argued that the application of four core technologies (cloud, artificial intelligence, platforms, blockchain) in finance requires speed control through financial policies considering complex factors such as social benefits, consumer stability, and industry advancement.

The Financial Services Commission plans to continue discussions on demographics, climate, and technology in the second half of this year and to compile and announce the results through public seminars by the end of the year.

The seminar titled "Financial Changes Brought by Future Mega Trends," hosted by the Korea Institute of Finance and sponsored by the Financial Services Commission, was held on the 8th at the Bankers' Hall in Myeongdong, Seoul. Participants, including Lee Hang-yong, President of the Korea Institute of Finance, and Kim So-young, Vice Chairman of the Financial Services Commission, are taking a commemorative photo. Photo by Heo Young-han younghan@

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