KB Financial to Launch Consumer Protection Quality Index to Flag Investment, Fraud Risks

KB Financial Group is launching a Consumer Protection Quality Index, or CPQI, to spot risks early, including mismatches between customers’ investment profiles and product risk, as well as financial fraud. The group said the move is aimed at strengthening trust in its financial services. 

KB Financial said on 24 it is pushing the consumer-rights measures to mark the fifth anniversary of the Financial Consumer Protection Act. 

Major affiliates, including KB Kookmin Bank and KB Life Insurance, will set up consumer protection committees within their boards. The group will also introduce CPQI to respond quickly to warning signs such as sales concentration in certain products or a sudden rise in customer complaints. 

The CPQI consolidates consumer-protection check indicators that had been spread across departments involved in risk management, compliance and product operations, covering the full process from product planning and sales to post-sale management. If indicators fall outside the standard, an early-warning system will be triggered.

CPQI is divided into four categories: before sales, during sales, after sales and other management indicators. Risk levels will be shown in a three-tier system — normal, watch and high-risk — to support early action and decision-making. 

Before-sales indicators include the appropriateness of matching product risk to customers’ investment profiles, the suitability of product mix by risk grade, and monitoring concentration risk in specific funds. During- and after-sales indicators track investor profit-and-loss status and complaint intake. 

A KB Financial official said the group aims to build a practical consumer-protection system that customers can feel, rather than a formal one, marking five years since the law took effect. The official said KB Financial will do its best to create a trustworthy financial environment through the new CPQI.