[Financial Services Commission]
[Financial Services Commission]

South Korea's financial authorities have begun work in earnest on designing a Korean-style inclusive finance development model. The effort will focus particularly on embedding inclusive finance into corporate governance structures, including discussions on introducing a chief inclusive finance officer, or CIFO, and establishing liability exemptions for financial firms engaged in inclusive finance activities.

The Financial Services Commission said Monday it held the inaugural meeting of the supervisory subcommittee under its inclusive finance strategy task force at the Government Seoul Complex.

The FSC launched the task force after Kim Yong-beom, the Cheong Wa Dae policy chief, raised the public role of finance as a key issue in May. The task force is divided into four subcommittees — general oversight, policy and retail finance, the financial industry, and credit infrastructure — to discuss fundamental improvements to the financial system.

The supervisory subcommittee is responsible for designing the overall policy direction for inclusive finance and laying the groundwork for its permanent institutionalization. It comprises 12 private-sector members, including subcommittee chair Kang Gyeong-hun, a professor at Dongguk University, along with the director of the financial policy bureau as secretary and representatives from the Financial Supervisory Service.

The supervisory subcommittee will focus primarily on supervisory issues, covering the establishment of an inclusive finance policy direction, the embedding of inclusive finance governance structures and liability exemptions for financial firms involved in inclusive finance activities. A separate asset-building sub-subcommittee will also be established to improve the quality of inclusive finance outcomes.

To establish the policy direction for inclusive finance, the subcommittee will examine domestic and international inclusive finance trends and the current state of Korea's financial legal framework. It will also discuss the path toward future legislation and regulatory reform, responses to changes in the digital finance environment, and measures to protect financially vulnerable groups.

On embedding inclusive finance governance, the subcommittee plans to discuss how to introduce the CIFO role, including related governance arrangements, key responsibilities, internal control integration, linkage with a comprehensive inclusive finance assessment, and consistency with the existing financial consumer protection framework. It will also examine inspection, sanctions and liability exemption issues related to inclusive finance initiatives.

The asset-building sub-subcommittee will address financial education for vulnerable groups, youth asset-building support and lifecycle-based asset management, with the aim of ensuring that asset-building opportunities arising from financial development do not become concentrated among certain segments of the population and widen inequality.

Participants at Monday's meeting agreed that while South Korea already performs well on key inclusive finance indicators — such as financial access and usage — compared with major economies, the country should go beyond simply following international trends. They said Korea should proactively put forward a Korean-style inclusive finance development model that leads new directions and discourse, building on its existing inclusive finance framework.

The supervisory subcommittee plans to meet one to two times a month to develop proposals, which will then be presented in turn at the Inclusive Finance Grand Transformation conference.


ehkim@heraldcorp.com