Lee Chan-jin (이찬진), head of South Korea's Financial Supervisory Service, met chairmen of bank holding company boards and urged the financial sector to increase information technology security investment and strengthen internal controls. He also stressed that boards should play an active role in improving governance, including raising the expertise of outside directors and ensuring transparency in chief executive officer succession procedures.

The Financial Supervisory Service said on Tuesday that Lee held a "2026 regular meeting" with chairmen of the boards of eight bank holding companies to discuss key issues in the financial sector and the role of boards.

Lee pointed in particular to the recent expansion of cyber intrusions at financial companies into ancillary systems not directly related to electronic financial transactions.

As security threats become more advanced due to factors including the potential use of AI, he urged financial companies to thoroughly manage IT assets and build autonomous defence systems that proactively identify vulnerabilities.

Lee stressed the need to guard against treating IT security as merely a matter of regulatory compliance or viewing related investment only as a cost. Under the recognition that it is core work to protect customers' assets and information and restore confidence in finance, he said boards should actively participate in strengthening security response capabilities.

On improving the governance of financial holding companies, he called for boosting the independence and expertise of outside directors.

Discussions on measures to improve governance that are currently being prepared include ways to expand outside directors' independence and support. Lee said meaningful change from institutional improvement requires outside directors' expertise and sense of responsibility.

He also pointed to the practice of boards routinely giving formal approvals for key management issues at financial holding companies. Of 993 items approved by the boards of eight bank holding companies last year, only 9 were approved with revisions and 1 was put on hold, while all others were approved as originally proposed.

He urged outside directors to make responsible decisions on major agenda items such as business diversification, executive compensation and performance evaluation indicators by actively requesting materials and using external experts.

He also asked for stronger transparency and fairness throughout ongoing CEO succession procedures at subsidiaries, including selection of the candidate pool, verification and evaluation, and management of related records.

Lee called for stronger internal controls in response to an increase in financial accidents at overseas branches. He stressed that, as local laws and transaction practices overseas differ from those in South Korea, companies should identify and manage structural vulnerabilities in transactions in advance. He also said supervisory systems should be strengthened so that the head office's internal control policies and management standards are applied consistently to overseas branches.

He said it is also necessary to pursue analysis of financial accident cases, build an integrated head office computer system, strengthen inspections of overseas branches and improve reporting systems. He added that internal control and risk management capabilities should be substantively reflected in personnel and evaluation systems.

The meeting held at the Financial Supervisory Service on Tuesday morning was attended by Lee and Gwak Beom-jun (곽범준), deputy governor in charge of banking, as well as the heads of the Bank Inspection Bureaus 1 and 2, and also by KB Financial Group Chairman Cho Hwa-joon (조화준), Shinhan Financial Group Chairman Gwak Soo-geun (곽수근), Hana Financial Group Chairman Park Dong-moon (박동문), Woori Financial Group Chairman Yoon In-seop (윤인섭), NH NongHyup Financial Group Chairman Kim Byeong-hwa (김병화), BNK Financial Group Chairman Oh Myeong-sook (오명숙), iM Financial Group Chairman Cho Kang-rae (조강래) and JB Financial Group outside director Lee Seong-yeop (이성엽).