FSS: "CCOs as Well as IT Executives Are Responsible for Resolving IT Incidents"

Responsibility Does Not Rest Solely with IT Executives; Consumer Protection Officers Must Also Play a Role

Beyond Technical Restoration in IT Incidents, Systems Must Be Established to Prevent Secondary Damage

Grounds for Compensation Must Be Prepared, Not Just Advance Risk Assessments of AI Algorithms

The Financial Supervisory Service has summoned Chief Consumer Officers (CCOs) from financial companies, instructing them to enhance their response systems for artificial intelligence (AI) errors and information technology (IT) incidents. The agency urged companies to establish systems that not only restore technology after incidents but also prevent secondary damage, conduct risk assessments of AI algorithms in advance, and prepare clear grounds for compensation in order to advance consumer protection frameworks. The Financial Supervisory Service emphasized that electronic financial incidents are the responsibility not only of IT executives such as Chief Information Security Officers (CISOs) and Chief Technology Officers (CTOs), but also fall under the purview of CCOs.

On May 21, the Financial Supervisory Service announced that it had held a 'CCO Meeting for the Protection of Digital Financial Users' at its headquarters in Yeouido, Seoul, to discuss these issues. The meeting was attended by Lee Jong-o, Deputy Governor for Digital and IT at the Financial Supervisory Service, as well as representatives from the Korea Federation of Banks, the Korea Financial Investment Association, the Korea Life Insurance Association, the General Insurance Association of Korea, and the Credit Finance Association. In addition, ten CCOs from major financial companies in various sectors were present.

Deputy Governor Lee stated, "It is true that productivity and convenience in finance have improved through digital and AI innovation. However, it is also an undeniable reality that new user inconveniences—previously nonexistent—have emerged as growing pains." He continued, "I hope that CCOs will actively play the role of coordinators within their companies, so that financial innovation can be rooted in consumer-centric digital management, combining both efficiency and inclusion."

Attendees discussed recent risk factors in digital finance. They identified key risks as follows: ▲AI bias and error risks ▲User choice being restricted by AI algorithm-based product recommendations and chatbot consultations ▲Financial exclusion ▲Unclear responsibility for IT incidents and delayed relief for victims.

The Financial Supervisory Service stressed that CCOs must take the lead in protecting financial consumers. Specifically, CCOs were encouraged to take responsibility for the following: ▲Checking user protection systems in the event of IT incidents ▲Preparing AI impact assessments and grounds for consumer redress ▲Promoting the establishment of an inclusive financial environment.

The Financial Supervisory Service emphasized that, in the event of IT incidents, companies should not only restore technical functions but also implement user notification procedures and alternative options. They also called for the prompt establishment of response systems, such as service termination, blocking, and data deletion, to prevent secondary damage. The agency mentioned that rational criteria and procedures for compensation must be established.

Additionally, the agency requested that, when introducing AI algorithms at different stages of the financial service lifecycle, companies should conduct advance assessments of the impact (and risks) on users and establish grounds for cancellation or compensation in case of damages caused by AI.

The agency also highlighted the need to focus on improving deceptive layouts or pattern designs that induce user errors, and to establish accessibility and protection measures for vulnerable groups, such as the elderly and people with disabilities.

A Financial Supervisory Service official stated, "Going forward, the Financial Supervisory Service will continue to actively support digital transformation and innovative growth in the financial sector, and faithfully implement a supervisory system for the proactive prevention of IT risks. In this process, we will also identify any additional factors that may infringe on user rights and request prompt responses from each financial sector."

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