By Yun Yong-Ro,
Vice-Chairman, Financial Supervisory Commission

In early April this year, I had a chance to visit Singapore to attend the ISOCO's General Assembly. There are so many ways to describe the country -- "A Fine City," a double entendre alluding to the city's neatness and penchant for fines; the National University of Singapore, reputed to be Asia's best; the excellent facilities and services at Changi Airport; and a population of 4 million people that boasts per income capita of $30,000.

But the real beauty of this country is in its status as the financial hub of the region: With many public agencies making bold investments overseas, organizations like Singapore's Wealth Management Institute are developing excellent human resources for related sectors. With the government offering various tax incentives to promote business, using innovative financial regulations and fostering a perfect, English-speaking environment, this country has done a truly marvelous job so far. 

So why can't Korea, a world leader in electronics, shipping and steel achieve a similar level of success in the field of finance as well?

■ Financial hub of Northeast Asia - too big a dream?

Let's take a look around the financial environment of Korea. Our financial system, despite much progress made in the past, still remains vulnerable time to time due to over-concentration within the market.

Local finance companies have a long way to go both in scale and profitability compared to many overseas. To put it harshly, we don't have a single world-class financial company of our own. Our financial supervisory body is also criticized for lacking expertise and a globalized mindset.

Right now, over a dozen countries in and around Asia are aiming to become the next big financial hub. Just a slight error on our side and within three to five years, Korea might find itself utterly left behind world financial trends, leaving its earlier ambition to rise up as a next financial power as nothing but a dream.

What should we to do at this point?

■ Comprehensive strategy on the way

What we need is a comprehensive strategy that could be directly applied under a clear vision. That's why we recently came up with an advanced roadmap for financial supervision.

The roadmap is the result of a combined effort by financial officials, outside experts and consumers who worked voluntarily to perfect it. It is a way Korea can meet the challenge posed by the world's financial giants.

The roadmap consists of five goals: changing the paradigm for financial supervision, improving consumer convenience, extending the autonomy of financial companies, protecting and strengthening consumers' rights and re-establishing the credentials of the financial advisory body. Under this policy lies another 100 tasks drawn up in detail. This would be pursued for the next three years.

Let me give you just few examples of the new implementation.

The paradigm for financial supervision would change from the past rules-based operation to a principle-based operation, and from supervision by profession to supervision by function. Registrations and permits for financial businesses would be combined for the convenience of those wishing to conduct business. The counters for the supervisory body and financial companies would also be combined to prevent overlap of information and significantly cut down on unnecessary reports.

We plan to cut down on on-site inspections and adopt paper inspection instead to reduce the workloads of financial companies. Much of the regulations regarding sales and operations overseas would be abolished. In the process of widening the autonomy of financial companies, we'd also make sure that such changes do not harm the rights and interest of consumers and investors by paying close attention. In particular, we'd introduce the "Best Advice" system, a safety net for consumers that requires financial companies to suggest an "appropriate financial instrument" and reveal all the "necessary details."

Finally the financial supervisory body would continue to build up expertise, informatization and transparency all around. More specifically, we'd improve the practice of re-employing our workers and bring in the participation of financial companies and outside experts in the process.

■ Dream come true

Many see the financial sector as the next growth engine of the country, responsible for opening the new era of per income capital of $30,000- $40,000. Some are pessimistic and wonder if we could ever reach that far given the existing system, practice and culture. But isn't this not a nation that has already topped the world with ships and steels and other electronic gadgets?

Some express doubt if the blueprint could actually be realized at the end of the incumbent administration. How can there be an obstacle to government efforts to establish a strong financial nation? Let's come face to face, instead, with cold, hard competition outside the country. We don't have much time at hand. We need to start right now. Our dream will come true.