Strengthening Internal Controls through Comprehensive Education at the 2024 Financial Risk Management Conference

On July 10, at the '2024 Financial Risk Management & #Compliance Conference' held in Seoul, and it was an honor to participate the event as a speaker. I emphasized the critical importance of internal controls in corporate management activities. Highlighted was the recently amended Governance Act in Korea, which mandates accountability structures in financial companies, underscoring the need for robust internal control mechanisms. Despite ongoing debates about its implementation, the amendment aims to link the causes and consequences of financial incidents to individual responsibilities, thereby preventing recurrence.

I proposed a tailored #education approach, stressing that each department and employee should receive customized training relevant to their roles. A clear delineation of duties and responsibilities is essential to achieving the ultimate goal of the act – preventing financial accidents.

Key components of the proposed education include:

• Social Roles and Risks: Training on the social roles of financial companies and the risks associated with fraudulent activities.
• Fraud Awareness Education: Programs to help employees recognize and report fraudulent activities effectively.
• #Whistleblower Systems: Training on internal whistleblowing procedures, including their significance, procedures, and guarantees of anonymity.

The establishment of an Internal Control Education Advisory Committee comprising regulatory authorities, academics, legal experts, and industry representatives was suggested. This committee would provide annual education guidelines, basic curriculum, and performance evaluation metrics to support the internal control education of financial companies.

Additionally, I recommended that external trusted third parties assist in providing continuous and specialized training, helping financial companies adapt to evolving regulatory environments and emerging financial crime trends. This collaborative approach aims to maintain the integrity and trust in the financial system, essential for social stability.

In conclusion, enhancing internal control through continuous, targeted education is vital for preventing financial misconduct and ensuring the reliability of the financial system.