Will financial accidents still disappear in the traditional industry? Implementation of ‘Internal Control Model Standards’

[딜사이트 차화영 기자] In the future, when selecting affiliated companies, credit finance companies (Yeojeonsa) will conduct evaluations based on criteria such as credit rating and sales, and receive approval from at least two departments. In relation to car loans, an escrow account is used when depositing the loan amount to a third party, such as a loan originator.

On the 25th, the Financial Supervisory Service announced that it had completed the enactment and revision of the ‘Model Standards for Internal Control in the Continuing Industry’ containing these contents. In November last year, the Financial Supervisory Service prepared a ‘plan to improve internal control in the business sector’ to prevent financial accidents. Based on this, it standardized the internal control standards that were operated differently for each company.

The Financial Supervisory Service and the industry rolled up their sleeves to improve internal control in the wake of the 10 billion won breach of trust that occurred at Lotte Card last year.

The best practices have been organized into four categories: ▲standard internal control standards, ▲guidelines for selection and management of affiliated service companies, ▲guidelines for improving used car finance sales practices, and ▲standard financial accident prevention guidelines. The previous three best practices have been in effect since March 31, and the standard financial accident prevention guidelines will take effect on the 26th.

First, standard internal control standards were established to ensure female warriors’ compliance with laws related to corporate governance and to establish the role of the internal control organization. The Women’s Company must define the authority and roles of the board of directors, CEO, internal control committee, etc. in relation to internal control and guarantee the appointment, status, term, independence, etc. of the compliance officer.

Guidelines for selecting and managing affiliates have also been created. First, when selecting an affiliate, approval is also received from departments such as the support department and control department in addition to the department in charge. The support department performs tasks such as preliminary credit evaluation of bidding companies, company evaluation, and selection. The control department checks whether the business department complies with internal standards and the evaluation and selection work of the support department.

Female Warrior also establishes basic qualification standards for affiliates (credit rating, experience, sales, etc.) and evaluates the qualification standards. When signing a contract with an affiliated company, we must check the soundness and reputation of the affiliated company, and after signing the contract, we will check whether business is normal and whether measures are taken to ensure the safety of personal information provided by the credit card company.

In relation to automobile finance, measures are being implemented to prevent loan originators from misappropriating loan funds. In the case of used commercial vehicles, Yeojeon pays the loan amount to the loan originator, and Yeojeon decides to inform customers of the main details of the loan through text messaging services.

At the same time, two or more actions are taken among the following: a phone call with the customer (happy call), verification of vehicle photos submitted by the customer before or after loan execution (vehicle authenticity, degree of deterioration, etc.), and payment using an escrow account.

In order to increase the effectiveness of financial accident prevention activities, a standard plan for financial accident prevention guidelines was also prepared, which includes the introduction of a rotating work system and a command vacation system. This also included the requirement that the compliance department be staffed by more than 1% of executives and employees.

An official from the Financial Supervisory Service said, “To ensure that a sound internal control culture can be established through the implementation of the best standards, each female company plans to quickly develop a computer system and internal regulations related to the implementation of the best standards.” He added, “The Financial Supervisory Service will strengthen internal control training through the Credit Finance Association and inspect the reflection of internal regulations and implementation status for each company.”