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Photo courtesy of the Financial Supervisory Service (FSS). |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) announced today that it will conduct on-site inspections of major online loan sales agents and intermediaries.
As digital transformation accelerates in the financial industry, more consumers are comparing and selecting financial products through online platforms. To ensure that consumers can make rational choices, the FSS will inspect the operation of algorithms used for loan products.
Starting today, the FSS will inspect four major online platforms with significant loan intermediary activity.
The inspection will focus on compliance with conflict-of-interest prevention standards under the Financial Consumer Protection Act. FSS inspectors, in collaboration with consumer protection experts, will analyze the loan comparison and recommendation algorithms to identify issues such as potential distortion in loan interest rates or limits, as well as false or exaggerated advertising. The review will also examine internal control procedures when the algorithms are changed and post-change management processes.
If weaknesses such as conflicts of interest are discovered, the FSS will immediately guide the companies to make corrections. If necessary, the FSS will work on improving internal controls and propose measures to prevent recurrence. The FSS will also encourage the industry to independently review and correct any vulnerabilities in their current algorithms, offering an opportunity for self-correction before taking strict actions against any unregulated business practices.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
