[Digital Today reporter Ji-young Lee] With the June 3 local elections over, the financial sector is turning its attention back to financial authorities and the National Assembly.

Governance reform at financial holding firms, digital asset institutionalisation, loan curbs for non-resident single-homeowners and a compensation liability system for voice phishing are more likely to return to the agenda in the second half.

Some supervisory issues are also gaining pace. The Financial Supervisory Service adjusted the level of sanctions by cutting fines on banks that sold Hong Kong H-index ELS products to around 600 billion won. It also moved to train consumer protection specialists with financial holding firms.

Security responses to the spread of AI and digital finance have also emerged as key tasks. The Financial Services Commission is operating a private advisory group to respond to high-performance AI security threats and is also reviewing measures to improve network separation rules.

In capital markets, weakness in KOSDAQ has continued, while expectations have grown for policy momentum after the local elections. With the so-called return effect among overseas stock investors limited, discussions are expected to continue on tax and institutional supplements to revitalise the domestic stock market.

• Governance reform and digital asset institutionalisation... will financial issues gain speed after the election? • FSS cuts fines on Hong Kong H-index ELS selling banks to 600 billion won • FSS to train consumer protection specialists with financial holding firms • FSC launches private advisory group to respond to AI security threats... reviews network separation • How long will KOSDAQ stay sluggish... policy momentum after local elections in focus • With limited return of overseas stock investors, RIA deduction rate cut to 80 percent... will supplements follow?

Last week, South Korean stocks saw sharp volatility as optimism over semiconductors clashed with profit-taking pressure.

Early in the week, expectations tied to Nvidia CEO Jensen Huang's visit to South Korea and the so-called second "kkambu meeting" stirred sentiment in heavyweight chip stocks such as Samsung Electronics and SK Hynix, pushing KOSPI to another record high.

KOSPI market capitalisation also entered the 7,000 trillion won era, and Samsung Electronics surpassed bitcoin in market capitalisation, highlighting a semiconductor-led bull market. Sentiment shifted sharply later in the week. Weakness in U.S. chip stocks triggered by Broadcom spread to the South Korean market, and KOSPI began to slide. A sell-sidecar was triggered on the main board.

KOSDAQ also fell sharply, slipping below 1,000 intraday for the first time in 3 months and posting a drop of about 5 percent, as risk appetite weakened broadly in small and mid-cap growth stocks.

SpaceX listing expectations and an issue involving inclusion in a space-tech ETF emerged as a new investment theme, but concerns remain over the burden of short-term surges and volatility stemming from a concentration in semiconductors.

• KOSPI breaks above the 8,600 mark for a record... stocks linked to the second kkambu meeting rise together • KOSPI market cap enters the 7,000 trillion won era... Samsung Electronics tops bitcoin • KOSPI plunges below 8,200 on Broadcom shock... sell-sidecar triggered • KOSDAQ breaks below 1,000 for the first time in 3 months... about a 5 percent plunge • Korea Investment Management joins SpaceX IPO... included in space-tech ETF • [Stock outlook] SpaceX listing imminent... can it overcome semiconductor volatility?

In the financial sector, moves continued to strengthen security and internal control infrastructure in line with the spread of AI and digital assets.

KB Kookmin Bank decided to work with ATON on technical verification of an authentication system based on quantum-resistant cryptography and to check whether it can be applied to key financial transactions such as logins, transfers and electronic signatures.

The Financial Security Institute moved to train digital asset security specialists, and the Korea Federation of Banks partnered with Upstage to begin building an AI-based advertising review system, the first such effort among financial industry associations.

IBK Industrial Bank of Korea introduced an AI system that analyses sales data for investment products to detect potential misselling, stepping up consumer protection and internal controls. Toss Income obtained the first ISMS-P certification in the domestic tax platform industry, and the NextTrade STO consortium gained momentum for pursuing full approval for an over-the-counter fractional investment exchange after the Fair Trade Commission decided not to pursue the case.

• KB Kookmin Bank to pursue next-generation authentication security technology verification with ATON • Financial Security Institute to train digital asset security specialists • Korea Federation of Banks begins building AI ad review system • IBK Industrial Bank of Korea introduces AI detection system for possible misselling of investment products • Toss Income obtains first ISMS-P certification for a tax platform • NextTrade STO consortium cleared by Fair Trade Commission... accelerates push for full approval

The financial sector's productive finance is expanding beyond simple funding support toward reinforcing the growth base of the real economy.

Support is also diversifying, including liquidity supply for small and medium-sized enterprises and small merchants, links to guarantee institutions and steps to ease interest rate burdens.

There are also signs that financial support is being extended to structural tasks such as directly checking investment demand on industrial sites and bringing technology transfers, job retention and business succession into the scope of financing support.

Another notable trend is the widening scope of productive finance beyond bank-centred credit support to areas such as securities and real estate finance.

• KB Financial Group contributes a 10 billion won co-prosperity cooperation fund for SMEs and small merchants • IBK Industrial Bank of Korea to supply 1.5 trillion won for inclusive and productive finance with KODIT and KIBO • Shinhan Bank visits an aircraft maintenance company to discuss productive finance support • Woori Bank promotes "productive business succession" linking jobs and technology • Hana Securities cooperates on productive finance with IPARK Hyundai Development Company

Other major moves in finance and fintech were also compiled.

KB Financial Group began procedures to select its next chairman and plans to finalise the last candidate on Sept. 11. KB Kookmin Bank launched the "KB Veterans Benefit Remittance Cheque" service for veterans benefit recipients living overseas, and Shinhan Bank built a financial partnership with Hoseo University based on financial education and industry-academia cooperation.

• KB Financial Group begins procedures to select next chairman... final candidate due on Sept. 11 • KB Kookmin Bank launches "KB Veterans Benefit Remittance Cheque" service on the 8th • Shinhan Bank builds financial partnership with Hoseo University

Moves also continued to expand service and sales bases, including designation as a main transaction bank, platform partnerships and expansion of overseas networks.

Woori Bank became the main transaction bank for the Korea Social Welfare Mutual Aid Association, strengthening the basis for providing financial services to social welfare workers. It also opened a loan consultation channel on a platform for medical professionals, expanding non-face-to-face finance touchpoints aimed at specific occupations.

Hana Bank opened a Subic office in the Philippines to expand its Southeast Asia network and also introduced a high-interest savings product that offers preferential rates depending on the national football team's performance.

• Woori Bank becomes main transaction bank for the Korea Social Welfare Mutual Aid Association • Woori Bank opens loan consultation channel on platform for medical professionals • Hana Bank opens Subic office in the Philippines... expands Southeast Asia network • Hana Bank launches savings product offering up to 11 percent a year depending on national football team performance

In the fintech sector, upgrades continued in everyday services tied to loans, dormant deposits, employment contracts and tax matters.

KakaoBank added a secured loan product for individual business owners to Naver Pay's loan comparison service, widening loan touchpoints for self-employed customers.

Toss introduced a service to reclaim dormant deposits with the Korea Inclusive Finance Agency, and Toss Bank added linkages for issuing health certificates and resident registration documents to its employment contract service. Toss Insurance implemented a system to respond to black consumers to protect planners, and Toss Income obtained the first ISMS-P certification in the tax platform industry.

Kookmin joined a global AI agent foundation and moved to expand AI agent payments and its data business.

• KakaoBank lists secured loans for individual business owners on Naver Pay loan comparison • Toss launches "reclaim dormant deposits" service with Korea Inclusive Finance Agency • Toss Bank upgrades employment contract service... links to issuing health certificates and resident registration documents • Toss Insurance implements system to respond to black consumers... protects planners • Toss Income obtains first ISMS-P certification for a tax platform • Kookmin joins global AI agent foundation... expands payments and data business