Press Releases - Financial Services Commission

Press Releases

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Jul 14, 2020

Vice Chairman Discusses Importance of Preparing for Post-pandemic Era

Vice Chairman Sohn Byungdoo presided over the 12th financial risk assessment meeting on July 14 to discuss the financial market conditions and monitor the progress in implementing the COVID-19 financial support.The following is a summary of Vice Chairman Sohn’s remarks.(ECONOMIC RECOVERY) Recent forecasts suggest that the global economy is expected to rebound after 2021 although the speed and shape of the recovery may be different from country to country as there are looming uncertainties.The economic indicators in Korea began to show signs of improvement backed by the government’s comprehensive K-quarantine response system and measures to support the real economy. Domestic demand improved for two straight months as consumption and business sentiment increased. Credit card transactions also rose compared to a year ago, while exports fell at a slower rate in June.In order to build upon these positive results and continue the recovery momentum, the government will work to ensure that the COVID-19 relief and support programs are implemented effectively.(PREPARATION FOR POST-PANDEMIC ERA) The qualitative changes to our lifestyle and the economy caused by the COVID-19 pandemic are here to stay. In this regard, agile responses to changes are required in the post-pandemic era.The pandemic has accelerated digital transformation and the move toward “untact” or contactless economic activities. As the pandemic exposed vulnerabilities in the global value chain, new growth industries have emerged and more businesses are reshoring. To prepare for an “untact” economic environment, the government has been promoting innovation and easing regulations through the financial regulatory sandbox program, open banking system and revisions to the three key data-related laws. To help businesses improve their competitiveness, the FSC along with relevant ministries and policy banks will provide consulting to those who consider switching business types or restructuring.The shift to
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Jul 13, 2020

Preliminary Application Opens for MyData Businesses

The FSC announced the opening of the preliminary application process for MyData businesses from July 13 until August 4.Prospective MyData service providers in the financial sectors should obtain license from the FSC. The preliminary application process is to ensure that prospective applicants meet the requirements and that the licensing process goes smoothly.The licensing process will generally take three months and in sequence. The FSC will begin to review up to twenty applications at once starting from August. Priorities will be given to the businesses that had already begun providing MyData services prior to the government’s announcement of plans for MyData businesses on May 13, 2020. To ensure fair and objective review process, the review committee will be made up of outside experts from diverse sectors, such as management, IT security, consumer protection, etc.The licensing process will begin in August.* Please refer to the attached PDF for details.
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Jul 09, 2020

FSC Chairman Speaks about Promoting Artificial Intelligence in Financial Industry

FSC Chairman Eun Sung-soo visited the Korea Insurance Development Institute’s automobile technology research center in Icheon-si, Gyeonggi-do on July 9 to see the application of artificial intelligence in auto insurance, and held talks on the topic of the insurance industry in the 4th industrial revolution and post-pandemic era.The following is a summary of Chairman Eun’s remarks.With the 4th industrial revolution, technological innovation is rapidly taking place throughout the world. The financial industry is also experiencing changes in its structure and terrain. In a post-pandemic era, this changing trend, such as digitalization of the economy and development of untact services, is expected to accelerate even further.The insurance industry has diverse channels through which it provides services to consumers, and is closely connected to different industries, which is why it has a high potential for convergence with innovative technologies. In this regard, the AI-based auto damage appraisal service is an excellent example of technological convergence in the insurance industry.The FSC will set up a working group to draw up plans to promote AI in the financial sectors, which will focus on improving regulations, building infrastructure and ensuring consumer protection.In order to ensure a continuous growth of the insurance industry, different attempts and tryouts for innovation and adapting to changes should be highly encouraged.The FSC will strongly support the insurance industry’s efforts at innovation through its regulatory sandbox program and continuous efforts to improve regulations.* Please refer to the attached PDF for details.
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Jul 09, 2020

Household Loans, June 2020

The outstanding balance of household loans in all financial sectors rose KRW8.5 trillion from the previous month in June 2020 (up 5.4% year-on-year).By type, mortgage loans increased KRW5.1 trillion in June (up KRW2.4 trillion year-on-year). Regular mortgage loans, jeonse loans and group lending expanded KRW5.0 trillion in the banking sector, while non-banks saw an increase of KRW20 billion. Other types of loans showed an increase of KRW3.5 trillion (up KRW1.1 trillion year-on-year) as the demand for credit loans went up.The government will closely monitor rising demand for credit loans while continuing to work on the stable management of household debt.* Please refer to the attached PDF for details.
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Jul 07, 2020

Government to Provide Consulting and Financial Support to Businesses in Restructuring

Vice Chairman Sohn Byungdoo presided over the 11th financial risk assessment meeting on July 7 to discuss the financial market conditions and monitor the progress in implementing the COVID-19 financial support.The following is a summary of Vice Chairman Sohn’s remarks.(COVID-19 FINANCIAL SUPPORT) With the 3rd supplementary budget passed at the National Assembly last week, about KRW4.7 trillion in additional funds has become available for policy banks, alleviating concerns about their financial soundness. The government will work to swiftly implement the new support programs as follow.(a) Support for suppliers and subcontractors in major industries: Based on the agreement between the automakers and policy banks, loans for auto parts suppliers have become available. A special guarantee program will also become operational this week with KRW10 billion from the supplementary budget. The government is working on final details to promptly begin providing support to the suppliers and subcontractors in key industries through the working capital support program. (b) Support for low-rated companies and corporate asset sell-offs: With the passage of the supplementary budget at the National Assembly, KRW1 trillion in capital injection has become available for the launching of a special purpose vehicle aimed at purchasing low-rated corporate bonds and CP. The government will closely work with other institutions to launch the SPV in July. The program to support corporate asset sell-offs has begun a preliminary demand survey and the application process will begin in mid-July for a fast-track review of applications.(c) Market stabilization measures: The bond market stabilization fund and the key industry stabilization fund have been functioning as backstops to the financial markets. Corporate bond issuance in May-June recovered to a pre-pandemic level. With interest rates and spreads showing signs of stability, financing conditions appear to have improved in the bond market. The
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Jul 07, 2020

FSC Chairman Underscores Balance between Financial Innovation and Data Security

FSC Chairman Eun Sung-soo attended a seminar held by the Financial Security Institute commemorating the day of information protection on July 7 and delivered a keynote address underscoring the importance of maintaining a balance between financial innovation and data security.The following is a summary of Chairman Eun’s remarks.(DIGITAL FINANCE) The COVID-19 pandemic has accelerated the trend for contact-less financial services and digital transformation amid the 4th industrial revolution. Consumer preference for online transactions, such as mobile-based simple money transfer or payment methods, has increased as well as the frequency of telecommuting and teleconferencing by financial institutions. The government has been actively pursuing policies to promote innovation in the financial sectors. As a result, a total of 106 ‘innovative financial services’ have been designated through the regulatory sandbox program. As open banking became fully operational in December last year, more than seven of ten economically active individuals now use open banking, and the number of account views and transfers reached more than a billion. Moreover, the revisions to the three major data-related laws including the Credit Information Act will go into effect on August 5.(NEW CHALLENGES) Innovation in digital finance poses new challenges. Unlawful activities, such as identity theft or vishing, can lead to financial crimes. With a growing number of big techs and other nonfinancial institutions playing bigger roles in the provision of financial services, the third party risk originating from nonfinancial sectors has increased. The scope of cyber threats has also become wider with the application of newly available digital technologies. In this regard, without a guarantee for the safe protection of personal wealth and identity, innovation in digital finance is nothing more than a house of cards.(BALANCE BETWEEN INNOVATION SECURITY) In order to maintain an appropriate balance between
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Jul 06, 2020

FSC Holds Seminar to Further Develop Open Banking System

The FSC held an open banking seminar to promote vibrant discussions on ways to further develop the open banking system on July 6. Vice Chairman Sohn Byungdoo attended the seminar and delivered congratulatory remarks. The following is a summary of Vice Chairman Sohn’s remarks.The launching of open banking service last year brought about meaningful changes to the financial industry and increased convenience for consumers. Cooperation between banks and fintechs big techs is making a “banking as a platform” possible. The ease of access to payments networks has enabled fintechs and big techs to come up with more innovative financial services in more efficient ways. For consumers, the increased convenience of being able to use a variety of financial services in a single app and not having to switch between different platforms offers them more choice.In order to build upon the progress and further develop our open banking system, the following factors should be considered.(a) Expandability: expanding open banking service to non-banks, such as mutual finance, to promote competition and innovation while boosting consumer convenience(b) Consumer trust: guaranteeing information security, data protection and consumer protection(c) Openness: providing an open platform for all participating banks and institutions(d) Stability: ensuring a close monitoring system to minimize risks that may arise from the participation of multiple playersThe government will support open banking’s expandability, stability and reciprocal openness through relevant regulations. It is expected that the open banking system will catalyze the development of more innovative financial services, as it combines the accountability and stability of the so-called legacy banks and the convenience and innovativeness of the fintechs and big techs.FURTHER PLANThe FSC and the KFTC will draw up specific plans to further improve the open banking system in the third quarter this year. More types of financial insti
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Jul 06, 2020

3rd Supplementary Budget to Ensure Implementation of COVID-19 Financial Support Programs

The FSC announced that more than KRW4.7 trillion in fiscal resources has become available to facilitate smooth implementation of the various pandemic-related financial support programs as the National Assembly passed the 3rd supplementary budget on July 3.COVID-19 FINANCIAL SUPPORT(a) KRW1.5323 trillion in emergency financial support for small merchants, SMEs and middle market enterprises(b) KRW3.327 trillion capital injection to policy banks for providing emergency liquidity support to major industries and enterprisesOTHER SUPPORT MEASURES(a) KRW10 billion to support economic recovery(b) KRW100 billion to support agriculture and fisheries(c) KRW25 billion to increase the availability of microloans for low-income, low-credit groups(d) KRW50 billion to support KAMCO’s corporate asset purchase program* Please refer to the attached PDF for details.
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Jul 02, 2020

FSC to Inspect Fraud-prone Sectors for Financial Consumer Protection

The FSC and the FSS unveiled plans for comprehensive inspections targeting fraud-prone areas to stem potential damages to financial consumers from illegal activities.BACKGROUNDAs low interest rates and ample liquidity in financial markets prompted a growing number of retail investors to jump into investment in high-risk financial products, incidents of financial fraud or improper practices have been on the rise, making retail investors vulnerable to huge losses. Frequent incidents of consumer damages could undermine investors’ trust in financial markets and spread into systemic risks. As such, the financial authorities will launch comprehensive inspections on targeted areas deemed vulnerable to fraud or other illegal activities.TARGET AREAS INSPECTION PLANS(TARGET) Four areas where consumer losses from illegal activities are concentrated► private equity funds; ► peer-to-peer lending; ► illegal activities by unregistered financial service providers; and ► illegal predatory lending practices vishing(INSPECTION FRAMEWORK) Inspection teams made up of officials from the FSS and other relevant institutions will be created to cover each target area and will report their progress once a month at the financial risk assessment meeting.(SECTOR-SPECIFIC PLANS)► PRIVATE EQUITY FUNDS: A two-track approach of (a) self-inspection of all private equity funds (a total of 10,394 as of May 2020) and (b) official site inspection of all private fund managers (a total of 233 as of May 2020) (a) Self-inspection (from July to September 2020): A taskforce made up of fund sellers, managers, trustees and administrators will begin self-inspections from mid-July and report results to the FSS upon completion. If any irregularities or illegalities are found during the inspection, the T/F is required to immediately report to the FSS. (b) Site-inspection (until 2023): An FSS-led inspection team will be established by mid-July to probe all private fund managers over the next three years.
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Jul 02, 2020

Implementation Status of COVID-19 Financial Support Programs

OVERVIEW OF FINANCIAL SUPPORT PROGRAMSIn response to the impact of the Covid-19 on the real economy and the spread of anxieties in financial markets, the government has introduced KRW175 trillion-plus financial support programs intended to help businesses and to stabilize markets. (a) KRW100 TRILLION-PLUS FINANCIAL SUPPORT PACKAGE to provide small businesses with emergency loans and stabilize financial markets(March 19 March 24) (b) KRW40 TRILLION STABILIZATION FUND FOR KEY INDUSTRIES KRW35 TRILLION ADDED TO THE FINANCIAL SUPPORT PACKAGE (April 22)To prevent gaps in the availability of support, the government has also prepared a KRW5 trillion working capital support program and KRW2 trillion-plus support package for auto parts industry. (June19)IMPLEMENTATION STATUS▪ Financial support programs for small merchants and SMEs disbursed KRW44 trillion, two thirds of the target amount of KRW68 trillion over the past three months.▪ Financial market stabilization programs (KRW73.5 trillion) serve as a backstop to the financial markets, although the uptake of such programs remained limited due to the faster-than-expected recovery in the markets.I. SMALL-SCALE BUSINESSES SMES (KRW68 TRILLION)(a) For small-scale businesses, KRW27.1 trillion out of KRW38.9 trillion provided (70%) in ultra-low interest rate loans, loan extensions and guarantees through policy banks and private banks(b) For SMEs and middle market enterprises, KRW16.7 trillion out of KRW29.1 trillion provided (57%) in loans and guarantees as well as interest payment and fee exemptionsII. MARKET STABILIZATION MEASURES (KRW73.5 TRILLION)(a) Stock market stabilization fund (KRW1.2 trillion out of KRW10.7 trillion total) and bond market stabilization fund (KRW3 trillion out of KRW20 trillion total) set up to provide a backstop to the financial markets(b) P-CBOs in the amount of about KRW504 billion and KRW695 billion issued in May and June, respectively, and KRW1.2 trillion in corporate bond and CP refinancing sup
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Jul 02, 2020

2020 Online Korea Fintech Week to be Available until the End of Year

The 2020 Online Korea Fintech Week which began on May 28 has attracted more than 170,000 visitors and 110 million page views during the one month period. A total of 150 virtual exhibition halls are available hosted by financial companies and fintechs.In online job fair events, 35 companies have participated, and more than a thousand job seekers applied for about 80 positions at 21 fintech firms.The Korea Growth Investment Corporation has successfully linked investors with fintechs and provided one-on-one meeting opportunities as well. As a result, about KRW52.9 billion in venture capital investment has been successfully provided to six fintech firms.The 2020 Online Korea Fintech Week will run until the end of this year at www.fintechweek.or.kr/2020.* Please refer to the attached PDF for details.
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Jul 01, 2020

FSC Announces Plans to Further Promote Use of Big Data in Finance

The FSC announced its plans to make financial big data more widely available on July 1, which include making improvements to the Korea Credit Information Services’ CreDB system and newly creating an open big data system at the Korea Financial Telecommunications Clearings Institute.BACKGROUNDData is considered as an essential commodity in digital economy, and opening up large sets of data stored at public institutions to be utilized by companies is crucial. In this regard, the FSC has been building the necessary big data infrastructure to facilitate the opening up, distribution and convergence of data through following stages.(CREDB SYSTEM) Personal and business credit information system called CreDB was established at the Korea Credit Information Services, offering financial data to financial companies, enterprises and academia beginning on June 3, 2019.(FINANCIAL DATA EXCHANGE) Financial data exchange was launched on May 11, 2020, providing a one-stop data search, transaction and distribution service.(OPENING UP PUBLIC FINANCIAL DATA) About 44.5 million pieces of public financial data stored at the FSC and nine other public financial institutions have been opened up to the private sector enterprises on June 9, 2020.(DESIGNATING DATA SPECIALIZING INSTITUTION) To ensure safety and security in the data convergence process, data specializing institutions will be designated in August 2020.IMPROVEMENTS TO CREDBDue to a rise in demand, the CreDB system needs to be improved to (a) make more types of data sets available, (b) improve server capacity to make deep learning and other types of more sophisticated data analysis possible and (c) make cross-convergence and analysis possible between the CreDB data and other types of nonfinancial data.(DATA SETS) Introduce insurance database (from July 1), user tailored database (from H2 2020) and educational database (from July 1) to be newly added to the CreDB(SERVER CAPACITY) Boost the current server capacity in H2 2020 to enable
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Jun 30, 2020

FSC Issues Suspension of Business Operation for Optimus Asset Management

The FSC decided to issue suspension of business operation for Optimus Asset Management on June 30 in order to protect investors and prevent vacuum in the fund management and operation amid recent disruptions due to ongoing probes related to alleged frauds.The suspension will be from June 30, 2020 until December 29, 2020, and Optimus Asset Management will be prohibited from engaging in collective investment business and other relevant businesses other than those considered to be necessary for investor protection or recognized by the financial authority.During the suspension period, the company executives will be removed from their duties and the designated administrators will take over their duties.* Please refer to the attached PDF for details.
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Jun 30, 2020

Government Seeks to Lower Risks in OTC Derivatives Market

The revisions to the Financial Investment Services and Capital Markets Act (FSCMA) were approved at a cabinet meeting on June 30, which aim to lower risks in the over-the-counter (OTC) derivatives market and improve regulations on asset management and crowdfunding. The revisions will be submitted to the National Assembly in July.KEY REVISIONSI. LOWERING RISKS IN OTC DERIVATIVES MARKET(REPORTING REQUIREMENTS) Financial Investment businesses, central clearing counterparties (CCPs) and corporations with more than a certain level of OTC derivatives transaction should report their transaction information to trade repository, or face a penalty of up to KRW100 million for violating reporting requirements.(LICENSING FOR TRADE REPOSITORY) Introduce a licensing system for trade repository, prohibit the use of the term ‘trade repository’ by unlicensed entities and establish guidelines for the qualification of executives and internal control standards.(SUPERVISION OF TRADE REPOSITORY) Trade repositories should get approval from the FSC when introducing new rules or making changes to their operational rules.(TRANSACTION INFORMATION) Trade repositories should provide transaction information to the financial authorities and disclose relevant statistical data.(MARGIN REQUIREMENTS FOR NON-CENTRALLY CLEARED OTC DERIVATIVES) Financial institutions with transaction balance of more than KRW3 trillion should exchange margins or face a penalty equivalent to the amount of profit generated by bypassing rules.II. IMPROVING REGULATIONS FOR ASSET MANAGEMENT CROWDFUNDING(PUBLICLY OFFERED FUNDS)(a) Establish a legal basis for the disclosure of information about fund managers, such as management experience, rate of return on funds under management, compensation scheme, etc.(b) Lower regulations on borrowing and lending for special asset funds, including investment on SOC to help improve the efficiency in the management of real asset funds(c) Allow variation in the distribution of profits and
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Jun 30, 2020

Vice Chairman Discusses Importance of Banks' Capital Buffers to Support Real Economy

Vice Chairman Sohn Byungdoo presided over the 10th financial risk assessment meeting on June 30 to assess the financial market conditions and monitor the progress in implementing the COVID-19 financial support.The following is a summary of Vice Chairman Sohn’s remarks.(COVID-19 FINANCIAL SUPPORT) As of June 26, about KRW56.4 trillion in financial support has been provided. Applications for the second phase support program for small merchants have become available at regional banks as well. Approximately KRW1 trillion in P-CBOs were issued on June 25 to support SMEs and major industries. Support from the key industry stabilization fund should be considered primarily as a backstop to the financial system rather than a bailout fund. As various support measures introduced at the beginning of this year are scheduled to expire in September, such as maturity extensions, deferments on interest payments and temporary deregulatory measures, the government will work with financial companies in deciding whether to further extend these support measures.(SOUNDNESS OF FINANCIAL INSTITUTIONS) Maintaining the soundness of financial institutions and providing support to the real economy are mutually reinforcing and complementary to each other. The IMF report released on June 25 also states that banks “should halt dividend payments and buybacks…to help support capital buffers.” Considering this, banks should continue to make lending available to support the real economy while enhancing capital buffers and loss absorbing capacity to prepare for a protracted pandemic situation.(HOUSING MARKET STABILIZATION MEASURES) The government has been working to prevent speculative demand in the housing market. As part of the follow-up measures, the issuance of mortgage loans for corporations will be restricted from July 1. In addition, to be eligible for mortgage loans in regulated areas, applicants should sell existing properties and move into new ones within six months. In order to ensur
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Jun 29, 2020

FSC Holds Financial MyData Forum & Info Session on Licensing Procedures

The FSC held a financial MyData forum on June 29 to facilitate discussions on the topic of “personal data meets finance and IT” and provide information about the licensing procedures for MyData businesses.Vice Chairman Sohn Byungdoo attended the forum and delivered congratulatory remarks. The following is a summary of Vice Chairman Sohn’s speech.Building infrastructure for MyData services can be seen as building waterways to facilitate smooth distribution of water. To ensure seamless operation of MyData businesses, the following four factors should be considered.(USER-CENTERED SERVICES) Consumer convenience should be improved by offering newly available financial services, such as personal credit or asset management services, while keeping in mind that data ownership remains with the consumer.(BUSINESS COMPATIBILITY AND EXPANDABILITY) ‘Open finance’ should be promoted through convergence of MyData with a variety of other old and new platforms.(RECIPROCITY AND FAIR COMPETITION) Free access to information should be promoted by financial companies, ICT firms and fintechs to improve consumer convenience. The government will work to foster an environment in which fair competition takes place with no regulatory arbitrage.(PROTECTION OF PERSONAL DATA) Personal data protection should be considered as a priority to ensure safety and security in the data industry.* Please refer to the attached PDF for details.
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Jun 29, 2020

FSC Seeks Revisions to Credit Business Act to Tighten Rules on Illegal Predatory Lending

The FSC introduced revisions to the Act on Registration of Credit Business and Protection of Finance Users to strengthen rules on illegal predatory lending on June 26. The proposed revisions are a follow-up measure to the government’s plans to combat loan sharking announced earlier.KEY REVISIONS(a) The term “unregistered credit service providers” and “unregistered loan brokers” will be changed to “unlawful private loan service providers” and “unlawful private loan brokers,” respectively.(b) The maximum annual interest rate charged by “unlawful private loan service providers” will be limited to six percent, and the re-issuance of loans in larger amounts with accrued interest as well as loan contracts without authentic documentation will be invalidated.(c) In order to prevent online brokerage activities that attempt to bypass regulations, more specific definitions will be applied to private loan businesses and private loan brokerage services.(d) The maximum penalty for unlawful private loan service providers and brokers will be increased from KRW50 million to KRW100 million. For false and/or exaggerative advertisements, penalty will be increased to up to three years of imprisonment or KRW100 million.(e) Consumer safeguards will be strengthened for private loan users by introducing more rigid requirements for document keeping and returning.The revisions will be finalized and submitted to the National Assembly after a 40-day promulgation period.* Please refer to the attached PDF for details.
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Jun 29, 2020

Early Implementation of Basel III Credit Risk Framework

The financial authorities announced that fifteen banks and eight bank holding companies will begin to gradually implement Basel III credit risk framework from the end of June 2020. IMPLEMENTATION SCHEDULEDomestic banks and bank holding companies were asked to notify the authorities by the end of May their preferred date to begin the implementation. A total of fifteen banks and eight bank holding companies applied for the early implementation as shown below and the financial authorities approved their implementation schedule.Standard Chartered Korea, Kakao Bank and K Bank will begin to implement Basel III credit risk framework beginning in January 2023.EXPECTATIONThe early implementation of Basel III credit risk framework is expected to boost the capital adequacy ratio of domestic banks and bank holding companies. The government expects that the increased capital adequacy ratio at banks will help make available more funding sources to finance and support the real economy.* Please refer to the attached PDF for details.
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Jun 25, 2020

Personal Debt Purchase Program to Begin June 29

Vice Chairman Sohn Byungdoo attended the launching of the Korea Asset Management Corporation’s personal debt purchase program on June 25 and spoke about the importance of inclusive finance.KAMCO, lending institutions and other relevant institutions signed a memorandum of agreement. Under the agreement, lending institutions may sell non-collateralized delinquent personal debt to KAMCO, which in turn will take over individual debt and help debtors with debt adjustment plans.KAMCO’s personal debt purchase program begins on June 29 for the initial duration of one year with the possibility of extending thereafter.The following is a summary of Vice Chairman Sohn’s remarks.With the government’s KRW175 trillion-plus financial support programs have helped to ease problems of market instability and liquidity shortage. However, widening income gap in the society needs to be closely watched. Job losses and business closures have created extra burdens for many individuals, while asset prices are also showing signs of instability in the property and stock markets. The delinquency rate in household debt has not increased, but the rising trend in household debt needs to be watched carefully.The agreement signed by KAMCO and financial institutions today is aimed at providing assistance to the most vulnerable debtors. The government introduced on April 29 a deferment of loan repayment program for individual debtors who are incapable of servicing debt due to the pandemic-related reasons. For delinquent debtors, KAMCO will take over individual debt from lending institutions and help with debt adjustment. To help establish a more appropriate relationship between lending institutions and debtors, the government will work on introducing a bill aimed at protecting debtors’ rights and preventing excessive debt collection methods.* Please refer to the attached PDF for details.
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Jun 24, 2020

Government Unveils Plans to Root Out Vishing

The government unveiled its plans to root out vishing (or voice phishing) scams through close coordination between the financial, communications and investigative authorities on June 24.BACKGROUNDThe government has been pursuing policies to promote inclusive finance and human security along with innovation-led growth. The advancement in digital technologies has led to a rise in vishing scams using new and more sophisticated tricks and technologies. With the widespread usage of smartphones, illegitimate use of burner phones and apps has been on the rise as well. Vishing is a crime that brings ruin to families and undermines trust in our financial and telecommunications systems. With more sophisticated tricks and tools, it requires strong, comprehensive and persistent responses from the government.KEY MEASURESThe government-wide collaboration in finance, communication and investigation will help strengthen vishing prevention measures from prevention to detection to punishment and in terms of assisting victims and raising public awareness.I. DEVELOP COMPREHENSIVE PREVENTION SYSTEM- Prevent the use of mobile phones in vishing scams- Require financial companies to adopt Fraud Detection System (FDS) to closely monitor suspicious transactions linked to vishing, and have them utilize big data and AI to share information with relevant public institutions- Strengthen duties and responsibilities of financial companies and telecommunications service providers in preventing vishing scams- Prepare plans to improve the personal authentication and ID verification system in the third quarter- Implement pilot projects and RD to develop new digital technologies to be applied in vishing preventionII. BOLSTER CRACKDOWN PENALTY- Strengthen crackdowns on financial scams including vishing: (a) set up close cooperation network with overseas investigative authorities while increasing crackdowns on smishing and other newly emerging types of fraud- Make statutory punishment on vishing more sev
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