FSS: "Consumer Protection Governance Spreading"... CCO Authority and Internal Controls Strengthened

On April 23, the Financial Supervisory Service announced that, following the introduction of the "Model Practices for Financial Consumer Protection Governance" at financial companies, a consumer protection-centered organizational culture is spreading rapidly. The number of companies where the board of directors directly receives reports on management strategies related to consumer protection increased from 55 to 69, and 11 companies have shortened the frequency of their internal consumer protection control committee meetings from semiannual to quarterly or similar intervals.

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According to the Financial Supervisory Service's inspection of 77 companies subject to the financial consumer protection status assessment (as of the end of January 2026), it was confirmed that, since September last year, most financial companies have established consumer protection governance in line with the model practices. The Financial Supervisory Service plans to assess the effectiveness of these systems through future evaluations.

The role of the board of directors has been notably strengthened. The number of companies reporting management strategies and policies related to consumer protection to the board increased from 55 to 69, and the number of companies operating subcommittees on consumer protection within the board rose from 2 to 15. A total of 41 companies (53.2%) have appointed directors with expertise in consumer protection.

The operation of internal consumer protection control committees has also improved. The number of companies that shortened the meeting cycle from semiannual to quarterly or similar intervals reached 11, and 73 companies (94.8%) now report resolutions to the board of directors. Additionally, 65 companies (84.4%) operate prior working-level consultative bodies.

The authority of the Chief Consumer Officer (CCO) has also been expanded. A total of 64 companies (83.1%) have granted the CCO pre-approval rights and the right to request improvements on key issues, including KPI design. The number of companies guaranteeing a term of at least two years for the CCO increased from 29 to 51. The number of companies appointing the CCO through the board of directors also rose from 16 to 45.

The professionalism and size of dedicated consumer protection departments have also been strengthened. The proportion of personnel in consumer protection departments increased from 1.65% to 1.87%, and 70 companies (90.9%) have staffed these departments with personnel who meet relevant experience requirements. All companies (77) were found to possess final decision-making authority on dispute and complaint matters.

The performance compensation system has also been restructured to focus on consumer protection. The number of companies reporting the results of KPI appropriateness assessments to the board increased from 43 to 57, and 69 companies (89.6%) have incorporated consumer protection indicators into the CEO’s KPIs. However, only 45 companies (58.4%) have reflected these indicators in employee KPIs.

The management function at the financial holding company level has also been reinforced. Four holding companies have established dedicated consumer protection departments, and one has appointed a holding company-only CCO. Group-wide management systems have been improved by incorporating consumer protection indicators into subsidiary performance evaluations and conducting internal control inspections in parallel. The Financial Supervisory Service stated, "Since the introduction of model practices, a consumer protection-centered work system and organizational culture are rapidly taking root across the financial sector," adding, "We plan to reflect the relevant content in future assessment criteria to ensure that the governance system leads to substantial enhancement of consumer protection."

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