Financial Supervisory Service, financial company CCO video conference
Financial companies “it is difficult to build a computer system”
The Financial Supervisory Service had an opinion on the 23rd with the financial consumer protection officers of financial companies ahead of the enforcement of the Financial Consumer Protection Act. Financial companies have agreed that the sales process must be re-established right away, but there is considerable difficulty in preparation.
Kim Eun-kyung, head of the Financial Supervisory Service’s Financial Supervisory Service, held a non-face-to-face video conference with 10 banks and 11 life insurance companies in charge of financial consumer protection (CCOs). It was a place to check the preparations for the prohibition law to be implemented on the 25th.
CCOs of financial companies who attended the meeting said, “In order to apply the six regulations of the Gold Law, it is difficult to re-establish the existing sales procedure and to establish a computer system.” In addition, he urged, “There is a need for a specific guideline on obligating the establishment of standards for internal control, which is delayed for six months after the enforcement of the prohibition law.” CCOs of financial companies also said, “It is necessary to communicate with the supervisory authorities in order for the law to be settled in a short time.”
In the field, a strong criticism is being poured out regarding the anti-prohibition law, which is expected to be implemented immediately, saying, “In fact, confusion is inevitable because it is enforced without any preparation. Some complain that the specific standards are ambiguous, and that the first thing to do is to focus on avoiding risks.
The enforcement decree of the prohibition against law was decided at a state council meeting late on the 16th. As of the 23rd, no detailed enforcement regulations have been issued. It will be applied in earnest two days later, but the financial sector has not received such guidelines. Consumers and financial companies as well as financial authorities do not know clear standards. This is why there are concerns about the law of prohibition.
On the other hand, intensive regulations and penalties follow. In the future, financial companies will have to pay up to 50% of their income as punitive penalties if they violate the six sales regulations. Sales staff may face fines of up to 100 million won. The six sales regulations are based on the principle of conformity and adequacy, the obligation to explain, prohibit unfair business practices, prohibit unfair solicitation, and prohibit false exaggerated advertising. The gold law contains the contents of expanding application of these regulations to all financial products.
As the controversy grew, the financial authorities announced a six-month grace period. However, financial companies that have to overhaul the system in a tight time are only inconvenient. The contraction in business is obvious. Even if a black consumer that abuses the rules emerges, there is no way to stop it now.
As if conscious of the complaints of financial companies, Kim Eun-kyung said, “We will continue to communicate and resolve the difficulties and suggestions mentioned at this meeting, and the authorities will actively support them in the future.” He urged the financial sector to work together to ensure that the law is not only enhancing the rights and interests of financial consumers, but also raising public confidence in financial companies.
The Financial Supervisory Service is planning to contact CCOs in various industries for the next three weeks to hear opinions from the field. A meeting was scheduled with non-life insurance companies on the 25th, financial investment companies on the 30th, credit specialists on the 6th of next month, and savings banks on the 9th.
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