Lee Chanjin Says "Righteousness Must Come Before Profit"...Urges Banks to Embrace "Gyeonrisaui" Management

Comprehensive Review of Product Sales from the Consumer's Perspective
FSS Urges Banks to Revamp KPIs
Warns That Banks Must Move Away from "Easy Interest Income Business"

On February 12, Financial Supervisory Service (FSS) Governor Lee Chanjin urged the banking sector to adopt the attitude of "Gyeonrisaui" (見利思義) - putting righteousness before profit - as a core management value. He also reiterated his call for banks to comprehensively reexamine the entire process of selling financial products from the perspective of consumer protection and to establish a key performance indicator (KPI) system centered on consumer protection.

Yonhap News Agency

Governor Lee made these remarks at a meeting held that day with the heads of 20 domestic banks, saying, "As social demands for financial consumer protection and stronger internal controls have grown, the role of the banking sector has become far more important than in the past."

In particular, he stressed that banks should make Gyeonrisaui, which means thinking of righteousness before profit, a core value in their management. He went on to call for a full overhaul of the entire process of financial product design, review, and sales from the standpoint of consumer protection, and instructed banks to put in place a KPI framework that is truly centered on consumer protection.

The FSS also plans to focus its supervisory capabilities on consumer protection in line with its "Roadmap for Improving Financial Consumer Protection." Accordingly, it will shift to a risk-based, preventive consumer protection framework and establish a dedicated consumer protection examination team for regular inspections. In addition, it explained that it will revamp the "Financial Consumer Protection Assessment" system so that the entire process from product design to sales can be checked in advance.

Governor Lee emphasized that it is time for the banking sector to embrace segments of the population that have long been marginalized, and he asked banks to reassess whether the customary practice of extending statutes of limitations is truly justified. He also urged them to actively inform debtors about systems that provide substantial help, such as "cost-of-living accounts" and the "long-term installment program" for victims of jeonse fraud. The FSS, for its part, announced that it will support the expansion of inclusive finance in the banking sector by preparing measures to vitalize supply chain finance and introducing a comprehensive evaluation system for inclusive finance.

Governor Lee further stated that banks should move away from "easy interest income business" and actively step up funding support for innovative companies as well as small and medium-sized, and mid-sized enterprises. He added that sustained efforts by the banking sector are needed because productive finance can lead to quality jobs for disadvantaged groups such as young people and persons with disabilities.

Regarding household debt management, he said the FSS will work together with the banking sector to manage debt in a stable manner and rationalize capital regulations so that bank funds can flow into productive areas.

Governor Lee also noted that an amendment to the Act on Corporate Governance of Financial Companies will soon be prepared, and he called on banks to immediately implement any measures they can take preemptively and to ensure that all areas requiring improvement are indeed corrected.

Finally, Governor Lee stated that although the financial environment is changing rapidly due to advances in artificial intelligence (AI) and digital transformation, the FSS will carry out its supervisory and examination work with an unwavering focus on financial consumer protection and financial market stability. He added that the FSS will continue to communicate actively with the banking sector so that voices from the field are faithfully reflected in policy and supervision.

Cho Yongbyoung, Chairman of the Korea Federation of Banks, agreed that the banking industry should contribute to national economic growth by supplying funds to productive sectors. Chairman Cho stated that the industry will meet the public’s heightened expectations by strengthening consumer protection and improving corporate governance.

The bank CEOs also expressed agreement with the FSS’s efforts to innovate governance structures and to comprehensively overhaul the financial consumer protection framework, and they responded that they will review matters from the consumer’s perspective from the very start of product sales through to the dispute mediation stage. They also said they will actively participate in expanding productive and inclusive finance in line with the creation of an institutional environment, including improvements in capital regulations. In addition, they discussed measures to enhance financial consumer rights and interests, such as simplifying procedures for individual debt adjustment.

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