Financial institutions

Financial institutions (금융기관/金融機關) serve mainly as intermediaries for savings and investment between savers and borrowers, and are commonly divided into six categories:
 * Banks;
 * Non-bank depository institutions;
 * Financial investment business entities;
 * Insurance companies;
 * Other financial institutions; and
 * Financial auxiliary institutions.

Key words
financial institution, bank, non-bank bank, financial investment, insurance company

Banks
To elaborate on the financial institutions making up each category under this classification, banks are divided into commercial banks and specialized banks.

Commercial banks consist of nationwide and local banks and branches of foreign banks. They are established and regulated pursuant to the Banking Act (은행법).

Special banks are financial institutions established under a special act rather than the Banking Act, and their main enterprises are banking businesses.

Specialized banks include the Korea Development Bank (한국산업은행], the Export-Import Bank of Korea (한국수출입은행), the Industrial Bank of Korea (기업은행), the National Agricultural Cooperative Federation (농협은행), the National Federation of Fisheries Cooperatives (수산업협동조합), and others.

Non-bank Depository Institutions
Non-bank depository institutions mainly concern themselves with taking deposits and lending, similar to banks, but are established for more limited purposes and fall under distinct regulations concerning their raising and management of funds.

That is, the scope of their business activities is narrower than that of banks, payment and settlement services are either non-existent or provided in a limited manner, and the focuses of their businesses are restricted in advance in accordance with each financial institution’s unique features.

Non-bank depository institutions comprise mutual savings banks, credit cooperatives including credit unions, community credit cooperatives and mutual banking entities, merchant banks and the postal savings.

Financial Investment Business Entities
Financial investment business entities include all financial institutions that primarily conduct the business of trading marketable securities in the direct financing markets.

These consist of investment traders and brokers (securities and futures companies), collective investment business entities, investment advisory and discretionary investment business entities, and trust business entities.

Insurance Companies
Insurance companies are those institutions that underwrite and operate insurance against death, disease, old age, or a variety of accidents including fires. They are established and regulated pursuant to the Insurance Business Act (보험업법).

In consideration of the features of the institutions and their businesses, they are categorized into entities providing life insurance, non-life insurance, postal insurance, mutual aid, and others.

Non-life insurance companies consist of property and casualty insurance companies, reinsurance companies, and guarantee insurance companies.

Other Financial Institutions
Other financial institutions include institutions mainly operating financial businesses that are difficult to classify among the financial institutions in the four aforementioned categories.

They consist of financial holding companies, credit specialized financial companies (leasing, credit card, installment financing, and new technology venture capital companies), venture capital companies (small and medium-sized enterprise establishment investment companies), securities finance companies, public financial institutions, and others.

Financial Auxiliary Institutions
Financial auxiliary institutions are those institutions that, rather than directly taking part in financial transactions, mainly provide the conditions necessary for smooth operation of the financial system.

They span institutions carrying out businesses related to financial infrastructure such as the Financial Supervisory Service, the Korea Deposit Insurance Corporation, the Korea Financial Telecommunications and Clearings Institute, the Korea Securities Depository, the Korea Exchange, credit guarantee institutions including the Korea Credit Guarantee Fund and the Korea Technology Finance Corporation, credit information companies, financial brokerage companies, and others.