The Financial Services Commission (FSC) will launch a Financial Inclusion Strategy Task Force to fundamentally overhaul Korea's financial system, citing the inability of the current structure to properly support vulnerable groups. Network separation regulations, which have hindered the expansion of artificial intelligence (AI) services at financial firms, will be eased starting next month.
FSC Chairman Lee Eok-won announced the plans at a press briefing held at the Government Complex in Seoul on Tuesday. "If the past year was focused on relief for the marginalized, it is now time to improve the very structure that creates marginalization," he said. The move marks the start of full-fledged institutional reforms to address the exclusion of mid- to low-credit borrowers, an issue criticized by Presidential Office Policy Chief Kim Yong-beom.
The task force will be organized into four divisions: general affairs, policy microfinance, financial industry, and credit infrastructure. Going forward, the FSC will push to designate Chief Inclusive Finance Officers (CIFOs) at financial firms and refine credit rating systems. Soundness regulations will also be rationalized, accepting criticism that a soundness-focused supervisory framework has deepened financial exclusion.
Chairman Lee stressed that the financial market should function through an organic division of roles among three tiers: institutional finance (first tier), policy microfinance (second tier), and restart financing (third tier). However, he criticized that as the banking sector accommodates only top-tier borrowers, the second and third tiers have become overloaded, entrenching a structure that excludes vulnerable groups.
"Banks, the first tier, are not performing their basic role and are only taking top-tier borrowers while pushing out the rest, who are then funneled en masse into the second tier, where only standardized and uniform management is possible without segmented criteria," Lee said. "What I, along with Chief Kim and others, are deliberating is that we must use this opportunity to try to find an answer."
Network separation rules will also be eased. "To enable financial firms to launch innovative products using AI, we will implement emergency measures to ease network separation regulations starting next month," Lee said. "We will also pursue a plan to fully lift network separation regulations for rigorously selected firms."
Lee also outlined plans to expand the scope of foreigner integrated account transactions, currently limited to stocks, to exchange-traded funds (ETFs) to promote the globalization of the capital market. The FSC will issue advance notice of the rule change as soon as possible, and for securities firms that have already completed preparations, it will issue no-action letters to support trading promptly. The foreigner integrated account is a system that allows overseas individual investors to trade Korean stocks through their domestic securities firms without needing a separate Korean account. The government also plans to hold a large-scale investor relations (IR) event in September, named "Korea Premium Week."
On the debate over the separation of finance and virtual assets — sparked by Hana Bank's acquisition of a stake in Dunamu — Lee took a flexible stance. "The separation of finance and virtual assets was part of emergency measures against virtual asset speculation in 2017," he said. "There have been changes in the global market. We will conduct a comprehensive review in connection with the introduction of stablecoins and second-stage legislation."
The FSC is also continuing to review measures to regulate jeonse (lump-sum deposit lease) loans for non-resident, single-home owners with speculative intent. Jeonse loans for single-home owners of apartments in the Seoul metropolitan area and regulated zones total 59,000 cases, amounting to 9.2 trillion won.
The FSC and the insurance industry met with the shipping industry the same day and announced that they will provide war insurance for 10 vessels operated by small and mid-sized shipping companies that have been detained in the Strait of Hormuz. Ten insurance companies will jointly underwrite the policy, with the lowest premium rate applied. The Korea Asset Management Corporation's annual support for its ship fund will be expanded from 200 billion won to 250 billion won, and the loan-to-value (LTV) ratio for shipping companies introducing eco-friendly vessels will be eased to up to 80%.
