Financial Supervisory Service Research Articles

자율주행자동차 상용화에 대비한 자동차보험제도 연구

On May 7, 2016, in the state of Florida, USA, a fatal accident occurred involving an autonomous vehicle and a large truck, leading to the death of the driver. This incident heightened interest in autonomous vehicles and sparked discussions on their implications, including the challenges and liability issues in the event of accidents during autonomous operation. The application of existing legal frameworks, such as Article 750 of the Civil Code on tort liability and Article 3 of the Automobile Damage Compensation Guarantee Act on operator liability, to accidents involving autonomous vehicles raises questions about identifying responsible parties and compensating victims. This study examines the applicability of these legal principles to accidents occurring during autonomous driving and proposes the introduction of a No-Fault insurance system as a novel automotive insurance mechanism to address these issues. The analysis revealed that the No-Fault insurance system, a solution to the problems posed by the current fault-based liability system and already implemented in several advanced countries since the early 2000s, was considered but ultimately not adopted in South Korea due to challenges in amending existing legislation, limitations in calculating insurance rates, and concerns over moral hazard, among other issues. However, as autonomous vehicles are poised to integrate into our lives more rapidly than anticipated, and the social concerns regarding traffic accidents during autonomous operation deepen, it is imperative to form a task force comprising the Ministry of Land, Infrastructure, and Transport, the Financial Supervisory Service, the General Insurance Association, among others, before it's too late. This task force should engage in research and discussions, while building a consensus among the public, to prepare for the new automotive market driven by the autonomous vehicle industry.

전문성이 필요한 산업에 속한 피감사기업을 감사하는 산업전문감사인의 감사행태

[Purpose] This study aims to examine the behavior of industry specialist auditors according to industry characteristics. Specifically, this study aims to provide evidence on the audit efficiency of industry specialist auditors by analyzing whether the audit hours and audit fees of industry specialist auditors are differentiated for industries requiring industry specialization designated by the Financial Supervisory Service.
 [Methodology] We used a sample of 19,115 firms and years for Korean listed companies from 2008 to 2020. For the industries requiring specialization, we used the industry groups selected by the Financial Supervisory Service in November 2023 based on the opinions of listed companies and accounting firms.
 [Findings] The results show that, first, industry specialist auditors are associated with higher audit fees and more audit hours on average, but these fees and audit hours are significantly lower for industries designated as requiring industry specialty, which can be interpreted as an audit efficiency. Second, the above association does not appear in the analysis using hourly audit fees, explaining the process by which efficiency gains are passed on to client firms. Third, the relations does not appear in analyses of audit quality measured by the absolute value of performance－matched discretionary accruals, providing further evidence of the efficiency with which audit quality is maintained at lower levels of audit time. These results can be interpreted as indicating that industry specialist auditors perform the audit process efficiently in industries where specialization is essential, and that the benefits of reduced audit efforts are fully passed on to the clients through this efficient audit process.
 [Implications] The contribution of this study is that it provides evidence on the audit efficiency of industry specialist auditors through data that directly manifests the need for specialization while reflecting the perspectives of both audited companies as consumers and accounting firms as suppliers of industry specialization.

식품기업의 ESG 경영이 재무성과와 기업가치에 미치는 영향

ESG (Environment, Social and Governance) activities of food manufacturing companies are likely to affect consumers’ consumption behaviors and companies’ management performance; however, research on the effects of ESG activities on management performance for food manufacturing industry is still in its early stage due to data access problems in Korea. In this study, we constructed panel data for the top 30 food manufacturing companies based on revenue over a period of seven years (2016∼2022) to examine the effects of ESG evaluation ratings on their management performance such as financial performance and corporate value. For the analysis, we employed fixed-effects specification, and used ESG rating data evaluated and released by the Korea Corporate Governance Service, as well as financial information and corporate valuation data published by the Financial Supervisory Service and the Korea Exchange. We find that the ESG rating of food manufacturing companies did not have a statistically significant effect on return on sales (ROS) and return on equity (ROE). However, results indicate that the rating had a statistically significant positive effect on price-to-book ratio (PBR) and Tobin’s Q. This suggests that the ESG activities of food manufacturing companies can potentially be an effective management strategy in enhancing the value of the companies in both the shrot and long-term dimensions.

The Impact of a De Facto CEO on Environmental, Social, and Governance Activities and Firm Value: Evidence from Korea

This study analyzes the influence of CEO types on corporate governance, focusing on de facto (substantial) CEOs. We examine how substantial CEOs impact environmental, social, and governance (ESG) activities (Hypothesis 1) and corporate value (Hypothesis 2). Data were collected from KIS-VALUE and DART (Electronic Disclosure System) from the Financial Supervisory Service, defining substantial CEOs as the highest remuneration recipients who exceed the pay of the company’s representative director. The results support Hypothesis 1, showing that companies with substantial CEOs are more likely to engage in ESG activities, potentially to improve public image while concealing self-serving behaviors. Hypothesis 2 is validated, indicating lower corporate value in companies with substantial CEOs, owing to the prioritization of personal interests over long-term profit maximization. Despite the limitations of exploring governance relationships beyond remuneration data, this study offers key contributions. It expands the research on corporate governance and ESG activities by identifying substantial CEOs through objective remuneration data. Additionally, it highlights the importance of an independent board for transparent governance and positive corporate value. Lastly, the empirical evidence shows the negative impact of misdirected ESG activities on corporate value. Using remuneration as an indicator, this study illuminates substantial CEOs’ influences on corporate value and ESG activities, providing insights for future research in this area.

Association between tobacco industry advertising expenses and tobacco advertising exposure among Korean adolescents

IntroductionMonitoring the activities and impacts of tobacco industries is vital for tobacco control. Based on tobacco industry financial statements and a nationally representative survey of Korean adolescents, we examined the...

감사인 특성과 계속감사기간의 감사보수

[Purpose]This paper examines the change of audit fee after the introduction of ‘International Financial Reporting Standards’. Specifically, this paper examines wheter the audit fee after initial audit changes according to the characteristics of auditors.
 [Methodology]Using listed firms in KOSPI market from 2011 to 2018 to examine the relationship between auditor characteristics and audit fee after initial audit engagement. The information of auditors are collected manually from the Financial Supervisory Service’s accounting portal and KIND system.
 [Findings]This paper shows that the audit fee increased even in the case of initial audit engagements since the introduction of the ｢International Financial Reporting Standards｣. Meanwhile, the audit fee in the second and third year after initial audit engagements showed that the audit fee of large audit firms increased, but the higher the average audit experience of their certified public accountants, the lower the audit fee was.
 [Implications]This paper provides the policy implication to the supervisory authorities by presenting the changed audit fee behavior.

계약전 발병 부담보 조항에 관한 연구

In the past disease insurance terms and conditions, the definition of disease was expressed as “occurring during the insurance period,” and there was a problem in that the onset time depended on the patient's statement, or the insurance company claimed the onset time before the commencement of liability to avoid payment of insurance money. In addition, the Financial Supervisory Service revised the terms and conditions to protect consumer rights and interests and incorporated the pre-contract insurance policy into the standard terms and conditions. However, in June 2017, the Financial Dispute Mediation Committee of the Financial Supervisory Service determined that The pre-existing conditions exclusion clause was invalid, and in July 2018, the corresponding clause was deleted from the standard terms and conditions, so that all insurance companies stopped including the clause. When the terms and conditions were revised to protect the rights and interests of insurance consumers, the incorporated The pre-existing conditions exclusion clause refused to pay insurance money to insurance consumers who faithfully fulfilled the notification obligation. This is contrary to the insurance protection expectations of policyholders, so the Financial Supervisory Service's action to return it to its original state is acceptable. The pre-existing conditions exclusion clause itself may conflict with other terms and conditions, and it is unfair to protect the insurance company, such as restricting the payment of insurance money even when the insurance company signs an insurance contract intentionally or grossly. The problem of reverse selection, which some are concerned about, can be partially solved by the interpretation theory or law of the current insurance terms and conditions, so it is reasonable for the Financial Supervisory Service to delete the burden guarantee clause to protect insurance consumer rights.

공무원으로의 벌칙의제 규정이 문서의 ‘공문서성’을 결정할 수 있는지 여부

Recently, the Supreme Court ruled that a document issued by the governor of the Financial Supervisory Service(FSS) is considered a public document according to Articles 29 and 69(1) of the Act on the Establishment of the Financial Services Commission. Article 69 of this Act states that individuals who are not public officials are treated as public officials when it comes to applying penalties under the Criminal Code or other laws. The governor of the FSS is classified as a public official by presidential decree, thus falling under this Legal Fiction of Public Officials. Based on this regulatory framework, the Supreme Court concluded that a document issued by the governor of the FSS should be considered an official document. This interpretation is justified as it is appropriate to interpret the governor of the FSS and other employees as public officials for the purpose of imposing equal responsibilities and providing them with the same protection as public officials. However, this interpretation does not justify treating crimes against non-government employees as crimes against government employees, as it broadens the scope of the current penalty system and serves as a compensatory mechanism for excessive punishment. According to this interpretation, there are always errors of the the actor. In this case, it would be appropriate to penalize the actor for falsifying a document under Article 15(1) of the Criminal Code. Despite the lack of merit in this interpretation, it is difficult to agree that interpreting, when they provide penalties for non-public officials based on the 'type of criminal law fiction,' exceeds the limits of interpretation. The role of the judiciary is to declare what the law is, and if bad legislation exists, it is the responsibility of the legislature to correct it through new legislation. Expanding the scope of punishment for bad legislation through an interpretation that goes beyond the literal meaning of the text.

제약·바이오 기업에 대한 연구개발비 회계처리 감독지침이 신용평점에 미치는 영향

[Purpose]Recently, the need for investor protection has increased due to growing volatility and a surge in stock prices of pharmaceutical and bio companies. Furthermore, industrial uncertainties widened owing to accounting issues such as pharmaceutical and bio companies’ recognition of development cost as asset. Under these circumstances, the Financial Services Commission and the Financial Supervisory Service released the “Supervisory Guidelines for Accounting Method of R&D Expenses in Pharmaceutical and Bio Companies” in September 2018 to resolve uncertainties and enhance transparency in their accounting.
 [Methodology]This study investigated how the market evaluates of pharmaceutical and bio companies’ recognized amount of R&D expenses through credit ratings. This study analyzed pharmaceutical and bio companies listed on Korea Stock Exchange (KSE) and the KOSDAQ market during 2016 and 2021. This study used the KIS credit score for the credit rating based on the credit rating model developed by Korea Investors Service.
 [Findings]The results are summarized as follows. The verification variable (After) and the dependent variable, the credit score variable (Score), showed a statistically significant positive (＋) value only in KOSDAQ companies. This indicates that supervisory guidelines for R&D expense accounting method of pharmaceutical and bio companies have a more significant effect on KOSDAQ companies than relatively large companies listed on Korea Stock Exchange.
 [Implications]This study is meaningful in that it empirically analyzed the effectiveness of the supervisory guidelines by examining the relationship between the guidelines and pharmaceutical and bio companies. Thus, useful information for the improvement and enactment of future accounting standards is provided by verifying the effect of the supervisory guidelines reflecting the unique characteristics of the industry.

판례 분석을 통한, 즉시연금보험 분쟁의 해결 방안 연구

In the disputes over immediate annuity insurance, the court's judgments of the first and second instances related to the insurer's duty to explain are presented. The disputes began in 2017, and the Financial Supervisory Service's Dispute Mediation Committee recommended that all inherited annuity products(maturity refund type) subscribers pay additional underpaid insurance, but insurers refused to pay collectively except for the mediation case. According to the precedents that consumers have won so far, insurers should specify the risks that “insurers can pay less than the minimum guaranteed rate at the time of the fall in interest rates” and “the monthly pension amount shall be paid after deducting the reserves for financing the maturity refund” in the terms and conditions. In addition, on the basis that the insurance company did not explain this to the customer, the court applied Article 3, Paragraph 4 of Act on the Regulation of Terms and Conditions to invalidate the incorporation into the contents of the insurance contract. Furthermore, the court orders the insurance company to pay the difference to the consumer based on the difference from the minimum guaranteed interest rate or the initial annuity insurance money (the amount without deducting the accumulated amount for the maturity refund fund). In this study, it was considered reasonable to apply Article 102 of the Old Insurance Business Act (current Articles 44 and 45 of Act on the Protection of Financial Consumers) rather than applying Article 3, Paragraph 4 of Act on the Regulation of Terms and Conditions when the insurer violates the duty of explanation. Also, the policyholder's negligence offset can be applied individually, and fairness can be established in accounting for unpaid insurance money. Moreover, in the immediate annuity insurance case, policyholders recognized that the insurer had violated the duty of explanation only after the monthly annuity less than the minimum guaranteed interest rate was paid. The question is whether to view it as the payment date of the monthly annuity of the company or as the time when the existence of the right to claim insurance money was known. In the judgments related to immediate annuity that have been issued so far, the position is that an insurer who refuses to pay insurance loses the lawsuit and that it is unacceptable as an abuse of rights against the principle of good faith that the statute of limitations for claiming insurance has expired. The Supreme Court precedent regarding accidental death benefit considered more emphasis on the pursuit of legal stability, refusing to recognize restrictions based on the principle of good faith, and strictly interpreting the extinctive prescription period. Presumably, the short-term limitation of three years (2 years in most cases subject to immediate annuity) applies to the right to claim insurance money, and it is difficult for general consumers to understand that they must file a claim in court to stop the extinctive prescription period. When the insurer refuses to pay the insurance money, the consumer believes the insurer's words and in most cases gives up on the claim, and even after a court judgment has been issued and the insurance claim is subject to the extinctive prescription period, the claim is frustrated again. Seems to be a very unreasonable result for consumers in. It is necessary to avoid the attitude of omitting key points and not explaining them in detail by delegating specific details to complex and difficult product terms and conditions. I think it's time to listen to the alternative of applying subjective starting points to insurance claims subject to short-term limitation period.

금융소비자보호법상의 금융분쟁조정절차에 관한 절차법적 측면의 고찰

Whether to emphasize the principle of private autonomy in the procedural aspect in mediation or the number and outcomes of case resolution through mediation is a matter of individual values and philosophy of each country or individual. In the former case, emphasis is placed on the provision of a fundamental resolution to a dispute such as satisfaction of the parties with the procedure or a genuine agreement between the parties, and in the latter case, the focus is on the cost-effectiveness of the mediator’s work. The former represents mediation based on the Singapore Mediation Convention(United Nations Convention on International Settlement Agreements resulting from Mediation), the latter represents the UK's Ombudsmen service.
 In general, emphasizing party-leading civil procedure countries are place importance on the parties' right to form the procedure itself or take the party’s initiative in mediation proceedings. On the other hand, court-leading civil procedure countries which are strengthening the authority of the courts taking the position that mediator must be a lawyer, or at least a person with a lawyer's qualifications. They thought mediation is fundamentally the same system like civil litigation.
 Unfortunately, the latter point of view could only be used as specifying mediation system of the country, but it is contradictory to the origin of ADR(Alternativie Dispute Resolution) system or mediation system. It goes without saying that it also contradictory to the standards for mediation of the Singapore Mediation Convention.
 This my view does not mean that there is no need for a dispute resolution method which emphasizes the number and outcome of case resolution. I am fully understand the reason why the performance-oriented dispute resolution method was activated in Korea.
 Therefore, I propose to establish a separate performance-oriented dispute resolution system from the party-leading mediation process. In that case, the dispute resolution procedure can play its own independent role as another form of alternative dispute resolution.
 In the case of the financial sector, between the roles of the Financial Supervisory Service and the Financial Dispute Mediation Committee’s work must be distinguished, and the Financial Dispute Mediation Committee needs to be operated as an independent institution. The goals of the Financial Supervisory Service should be different from the goals of the Financial Dispute Mediation Committee. While the Financial Supervisory Service should play the role of a representative financial regulatory body, the Financial Dispute Mediation Committee is not a tool to increase the regulatory effect of the Financial Supervisory Service, but rather stands impartiality between financial consumers and financial institutions to resolve financial disputes fairly.
 Korea's financial dispute mediation, which gave the same effect as a final judgment effect to the decision of the Committee, without guaranteeing the independence of the Financial Dispute Mediation Committee, could be problomatic in Dispure Resolution System. This ends to blocking the path to judicial review of court.
 In case both parties do not object within two weeks of the financial mediation committee’s decision which regards as consent of both and only on party’s consent(usually finantial consumer’s consent) regards as bilateral consent (acceptance) is not fit for Korea civil procedure system. The Korea civil Procedure Act grants Res Judicata effect to settlement and the effect also recognized in mediation of the Financial Dispute Mediation Committee’s decision.
 It is also not appropriate to translate the UK Financial Ombudsmen Service as a mediation. There is also a big problem in combining the UK financial ombudsmen service that recognizes unilateral consent within a very limited scope. UK Ombudsmen service is a unique system which is different from the existing worldwide ADR or mediation.

A Comparative Study on the Measurement of Gender Pay Gap Analysis: Oaxaca-Blinder vs Pay Ratio Method

Purpose - This study purposes to investigate the methodology of measurement in a comparative way by pitting the traditional approach against the recently new approach: Oaxaca-Blinder medium variance and pay-ratio method. Given that Korea’s gender pay gap has been debated on diversity, equality, and inclusion, this study attempts to explore an alternative measurement method towards remedying the situation in Korea. Examining the methodology for analyzing the pay gap is crucial. Previous studies (Heath et al., 2013) have struggled to define the gender pay gap and to explain the phenomenon’s effect in the workplace. This difficulty is experienced because the scope of influence on pay differences is broad and pay-related exceptions always appear in companies.
 Design/Methodology/Approach - This study, using the data of listed companies of the Financial Supervisory Service and HCCP (Human Capital Enterprise Panel) data supported by Korea Research Institute for Vocational Education and Training, analyzes the gender wage gap in Korea in two different measurements. We employ the Human Capital Corporate Panel data (HCCP) for Oaxaca-Blinder method and collect 31,694 employees’ information between 2007 and 2017 from the database. For the organization-level approach, we extract data from the Data Analysis, Retrieval and Transfer System (DART), which provides all the information of publicly-traded firms in Korea disclose. In the DART system, we obtain the pay amounts as well as the populations of 454 firms, randomly generated between 2019 and 2021. These data are matched to the TS2000 database to incorporate the sample firms’ financial information.
 Findings - The results of this study are notable. First, in terms of the Oaxaca-Blinder, the gender wage gap, based on the average annual salary, stands at 36% over the past 10 years. In particular, the gap notably expanded from the manufacturing industry. Second, the women pay-ratio quintile method shows an average pay gap of 32.5%. The effects of data and measurement methods are important. This means the impact of human resource related variables on the gender pay gap is much bigger and consistent in Korean enterprises.
 Research Implications - This study has the following theoretical and practical implications to resolve the pay gap. First, in the pay gap between male and female workers, it is necessary to look more closely at pay-related items and measurement method. Second, it is meaningful to strengthen the evaluation of performance through the disclosure of pay information. Third, in order to reduce the pay gap for women, it is necessary to avoid unfair discrimination in terms of personnel management not only during the employment stage but also after employment.

A Perception of individual variables on Housing Price in Housing Policy

Recently we have a great interest in housing policy. The purpose of this study is to analyze the factors affecting housing prices and to reduce housing anxiety in the long term. This is to derive housing stability and predictable housing policy by stabilizing housing price. The research method was to analyze the data of the survey of the National Statistical Office. The Financial Supervisory Service and the Bank of Korea 2020 Household Financial Welfare Survey Table. The effects of the individual variables set in the research model were analyzed through logistic regression analysis. The data analysis was conducted using the statistical program SPSS 21.0, The factors affecting the housing price outlook were analyzed. The results of this study are as follows: Householder

자동차 경성 사기 방지방안에 관한 연구

The main culprit of car hard fraud is using social media to recruit people through a legal method of recruiting part-time jobs and engaging them in crimes. Through this, criminals intentionally cause traffic accidents targeting vehicles that violate the law and acquire insurance and settlement money from the victim driver or insurance company. As a result, the purpose of the study is to present measures to prevent insurance leakage and increase insurance premiums for auto insurance subscribers. The method of research is to identify the status and trend of insurance fraud by the Financial Supervisory Service, identify cases of auto-hard fraud based on Internet and domestic and foreign research data, and identify what measures insurers are taking to prevent damage to insurance fraud. As a result of the study, car-hard fraud is causing an accident by intentionally colliding a vehicle that violates traffic laws. Through this, the high proportion of the victim drivers' negligence and the fact that the perpetrator claims to be a negligence accident are exploited by the insurance company. Insurance companies are responding by establishing a system that can detect habitual criminals, but it is less efficient in crime prediction and detection, and it seems that there is a limit for insurance companies to respond to and detect first-time criminals. Therefore, it was derived that it is possible to prevent insurance fraud only by preparing countermeasures through a more scientific and detailed approach. In conclusion, car-hard fraud are becoming increasingly intelligent, and as a result, it is difficult to arrest criminals, so crimes are on a continuous increase. In order to eradicate such crimes, a control tower should be created under the Financial Supervisory Service to predict and arrest insurance fraud crimes. The first offender of a fraudulent crime using a car has a limit that cannot be arrested. Therefore, a detective system should be established to approach from the recruitment stage through social media, participate in crime execution, secure evidence, and request an investigation to an investigative agency. Car fraud criminals target vehicles that violate traffic laws, so if an accident occurs in violation of traffic laws, the driver is obligated to receive compliance education from the Korea Transportation Safety Authority, and The punishment regulations should be revised so that criminals can be reasonably punished.

Development of eClaim system for private indemnity health insurance in South Korea: Compatibility and interoperability.

South Korea has the mandatory National Health Insurance (NHI) and supplemental Private Indemnity Health Insurance (PIHI). According to the Financial Supervisory Service, the share of the population with PIHI increased to 66% in 2018 due to the financial burden. However, since the traditional PIHI claim workflow is based on the paper attachment method, it is a big burden to every stakeholder and limits the usability and accessibility of the claims data. To improve the traditional PIHI claim workflow, we developed the electronic claim (eClaim) service for the PIHI in Korea. We also applied the HL7® (Health Level Seven) FHIR® (Fast Healthcare Interoperability Resources) standard to ensure interoperability of the claims data. The proposed eClaim Service has been launched in 2017. It has been increased from 8155 in the first half of 2018 to 114,087 in the second half of 2020. Currently, 60 healthcare providers and 22 payers participated in this service. In this study, we proposed an eClaim workflow and service to improve the legacy system. The proposed method can be helpful to other entities planning for their own health insurance system and also applied to various practical purposes including value-based care, automated claim review, and clinical research.

고등학교 <경제 수학> 과목의 금융 분야에 대한 비판과 제언

In this article, we have analyzed the financial contents in high school <Mathematical economics>, first introduced by 2015 Amended Curriculum, from the curricular integration perspective by comparing them with those in 2020 <Elementary and secondary standards for financial education> by Financial Supervisory Service and Korea Institute for Curriculum and Evaluation, 2015 <Social studies curriculum>, 2015 <High school liberal arts curriculum>, and 2015 <Home economics and information studies curriculum>. Through such analysis, we have pointed out some limitations of the financial contents in high school <Mathematical economics> and have offered an alternative for them. The limitations we have found are as follows: firstly, high school <Mathematical economics> is not well integrated to <Elementary and secondary standards for financial education> and the other subjects because it only deals with savings but not investments while the others deal with both. Secondly, it confuses pensions and annuities causing misconception. Thirdly, its contents on annuities and perpetuities are not realistic. As a concrete alternative for such criticism, we have suggested that the subject should include valuation of stocks and bonds instead of annuities and perpetuities. And we have further shown that we do not need additional mathematical concepts in this case because valuation of stocks and bonds is also an application of geometric series and infinite geometric series just as that of annuities and perpetuities and that we have the additional educational benefit of enhancing integration with the differentiation chapter in the subject by differentiating bond prices with the differentiating techniques allowed in the subject.

EDR을 활용한 자동차 보험사기 의심 사례 분석

According to the recent press release from the Financial Supervisory Service, automobile insurance fraud is increasing every year. The government tried to respond to insurance fraud by enforcing the Special Act on Prevention of Insurance Fraud. However, the size of insurance fraud is increasing due to intelligent and organized insurance scammers. In order to respond to insurance fraud, the vehicle driving information prior to a collision must be objectively verified by the vehicle accident analyst. EDR is one of the functions of ACU to record the event data when crash occurred. EDR data should be verified whether the data is recorded from the specified situation by using PDOF result, airbag deployment status and ignition cycle. In this study, one of the vehicle insurance fraud case was covered. In that accident case, the driver claimed that the vehicle could not be operated due to out of control. In the EDR data, the driver did not manipulate the vehicle event data though it was in a dangerous situation. So, when the EDR data was recorded and could be download from a damaged vehicle, the driver's operation information can be verified.

A Study on the Operational Factors of Case Study for INTENALIZATION in the Business Continuity Management System in Commercial Bank

Purpose: This paper aims to investigate the relation between BCMS operating factors and organization inter-nalization. To achieve the purpose of this study, the followings detailed objectives are established. First, the dif-ferences are clarified through comparative analysis by investigating the operating status of the BCMS of domestic commercial banks according to the Financial Supervisory Service s BCP standards. Second, the operating factors are analyzed and organized to see if they affect the internalization of each bank s BCMS organization in the BCMS operation process. Third, to examine the methodology of organizational internalization of the bank BCMS, in-depth interviews are conducted with the relevant expert group, and the methodology of organizational internal-ization of the banking BCMS is proposed. Method: In order to study the operating factors for internalization of BCMS in organization, the author inves-tigated BCP operating level by comparison analysis the BCMS status quo of the four commercial Banks in Korea. The operating factors identified as scope of this study are BIA(Business Impact Analysis), RA(Risk Assessment), Business Management Strategy and BCP exercise, In addition, an FGI(Focus Group Interview) was conducted for BCM experts to study the methodology for raising the level of organizational internalization of BCMS. The FGI conducted qualitative surveys through in-depth interviews with the experts. Results: The operating way for BCP exercise, cycle and exercise types etc, are the factors to impact the level of BCMS organization internalization. The author derived the methodology for the BCMS internalization to the Bank, it is considered in terms of education and training for staffs, activation of communication between organ-izations and individuals, BCMS operating standards in detailed level to avoid any doubts in BCM operation and organizational culture. Conclusion: The author reached the conclusion that organization need to enhance the cognitive level of the members through education/BCP exercise, activated communication, operating detailed BCP procedure, interest and participation of top-management and establishment organization’s culture which respect the BCM, espe-cially in order to form an organizational culture, mutual respect and the formation of a trust relationship are continuously needed since culture is not formed in short period of time.

An Examination On Factors That Influence The Creation Of Economic Value Added To The Professional Teams: Focusing On Korea Baseball Organization (KBO)

The research seeks to derive the economic value added (EVA) of 6 franchises from the Korea Baseball Organization (KBO) and concurrently investigate the revenue components contributing to EVA. EVA is regarded as one of the efficient methods on estimating or assessing corporations’ actual economic benefits. For the procedure, financial statements of domestic professional baseball teams for 3 consecutive years (2016-2018), which were released to the Data Analysis Retrieval and Transfer System (DART) of the Financial Supervisory Service (FSS), were utilized. First, NOPLAT, IC, ROIC, and WACC, which refer to essential elements of estimating the EVA, were calculated respectively. Second, Pearson's correlation analysis was conducted between the EVA and the profit indicated in the income statement of the 6 teams. The results of the study are as follows: In case of Doosan, LG and SK, main business revenues showed the highest correlation with EVA, and Kiwoom and Samsung showed the highest correlation with EVA through the contributing factor of ticket sales revenue. Finally, for Lotte, advertising revenue was highly correlated with bringing EVA to the team

Estimating the BIS Capital Adequacy Ratio for Korean Banks Using Machine Learning: Predicting by Variable Selection Using Random Forest Algorithms

The purpose of this study is to find the most important variables that represent the future projections of the Bank of International Settlements’ (BIS) capital adequacy ratio, which is the index of financial soundness in a bank as a comprehensive and important measure of capital adequacy. This study analyzed the past 12 years of data from all domestic banks in South Korea. The research data include all financial information, such as key operating indicators, major business activities, and general information of the financial supervisory service of South Korea from 2008 to 2019. In this study, machine learning techniques, Random Forest Boruta algorithms, Random Forest Recursive Feature Elimination, and Bayesian Regularization Neural Networks (BRNN) were utilized. Among 1929 variables, this study found 38 most important variables for representing the BIS capital adequacy ratio. An additional comparison was executed to confirm the statistical validity of future prediction performance between BRNN and ordinary least squares (OLS) models. BRNN predicted the BIS capital adequacy ratio more robustly and accurately than the OLS models. We believe our findings would appeal to the readership of your journal such as the policymakers, managers and practitioners in the bank-related fields because this study highlights the key findings from the data-driven approaches using machine learning techniques.