To enhance the transparency of financial examination procedures, the Financial Supervisory Commission (FSC) has announced its primary examination findings for the second half of 2025, pursuant to the "Principles for Effective Financial Examination". The announcement comprises findings selected from various industry sectors that involve significant systemic issues or common deficiencies. These findings are categorized by business activity, accompanied by recommended corrective actions.
       The FSC stated that the primary examination findings identified in the second half of 2025 cover 12 industry sectors including financial holding companies. The main concerned issues including “Anti-Money Laundering (AML/CFT/CPF),” “Customer Protection,” “Cyber Security,” and “Real Estate Lending Business.” The primary examination findings and corrective actions for relevant business activities are as follows    :
1. AML/CFT/CPF:
(1)    Primary Findings
A. Failed to properly assess the geographical relevance of corporate account openings and the reasonableness of the actual business addresses during the customer due diligence process.
B. Failed to strengthen the verification of the source of funds when outward remittances were returned by other banks due to suspected suspicious activity; inadequate scrutiny of transaction reasonableness involving a common agent performing large cash withdrawals across various legal entity accounts, despite certain related accounts being flagged for suspicious money laundering activities.
C. Inadequate verification of the rationality of alerted transactions for high-risk customers and a lack of supporting documentation, resulting in premature conclusions that transactions were unrelated to ML/TF; delays in registering and implementing restrictive measures against high-risk foreign nationals exhibiting abnormal activity.
(2)    Corrective Actions
The FSC stated that, in response to the constantly evolving methods of fraud and money laundering, financial institutions should, when conducting account opening reviews, understand the geographic relationship between a corporate client’s place of incorporation and the location of the account-opening branch, as well as the purpose of opening the account. For abnormal transactions, institutions should, under a risk-based approach, verify the source of funds and ensure that transaction patterns align with the client’s business profile. Regarding high-risk customers, a robust verification process for suspicious transactions must be conducted; this includes cross-referencing existing data on high-risk foreign nationals and strictly enforcing subsequent control measures. By integrating rigorous account opening reviews, transaction monitoring, and follow-up controls, financial institutions aim to effectively prevent fraud and money laundering.
2.Customer Protection
(1)    Primary Findings
A. The customer obtained a bank loan within three months prior to applying for the insurance policy, using it as the source of premium payments, and the sales agent failed to duly complete the solicitation report.
B. Lack of balanced disclosure during the promotion of investment-linked insurance products connected to income-distributing funds; specifically, overemphasizing distribution payouts while neglecting to disclose that such amounts are not guaranteed and that payouts may be drawn from the principal.
C. For cases involving irregularities in solicitation where the insurance company sought clarification from the sales agent, responses were provided solely by the sales agent, and no review or confirmation mechanism for such inquiries was established.
D. In conducting advertising and marketing for exchange-traded funds (ETFs), required risk warnings regarding investment performance were not disclosed, and the methods, assumptions, and limitations used in calculating such performance were not specified.
(2)    Corrective Actions
The FSC reminds that insurance salespersons are obligated to honestly complete solicitation reports. For insurance product sales documents, product characteristics must be explained and relevant risk warnings disclosed to prevent consumer disputes. Insurance brokers and agencies are required to establish a review and confirmation mechanism for underwriting inquiries from insurance companies; this ensures the suitability of insurance products for financial consumers and strengthens the management of abnormal solicitation cases. Furthermore, when marketing ETFs and funds, financial institutions must disclose required warnings or information in advertisements according to regulations, avoiding overemphasis on performance that could mislead investors.
3.Cyber Security
(1) Primary Findings
A. Deficiencies in protective controls for external personal data transmission, such as incomplete filtering criteria, lack of periodic reviews for filtering rules, and failure to maintain comprehensive audit trails.
B. Inadequate management of privileged accounts, including their use for routine daily operations and the failure to promptly change passwords after use.
C. Substandard security management for host systems, characterized by the absence of database control policies or security baseline standards for configuration parameters, as well as the failure to disable unnecessary services.
(2)Corrective Actions
The FSC reminds financial institutions to regularly review the completeness and effectiveness of personal data filtering rules for emails and websites, to properly retain comprehensive audit trails, to grant privileges to privileged accounts in accordance with the principle of least privilege, and to promptly revoke access and change passwords after use. Institutions should also establish standards and procedures for secure configuration parameters and settings of host systems, so as to strengthen host system security.
4.Real Estate Lending Business
(1)Primary Findings
A. Lack of verification to identify potential property speculators among customers who repeatedly purchased and sold real estate within a short period while continuously applying for housing loans, and failure to develop corresponding risk control mechanisms; and failure to investigate the source of funds and the relationship between the borrower and third parties for large cash deposits or third-party remittances used as housing payments.
B. Deficiencies in credit management for loans secured by vacant land where construction had not commenced despite multiple renewals; specifically, failing to monitor the land development schedule or evaluate the reasonableness of construction plans during the credit renewal process.
(2) Corrective Actions
The FSC reminds financial institutions to stay vigilant against the behavioral patterns and characteristics of potential property speculation and "straw buyer" loan applications. Institutions should strengthen and strictly implement prevention mechanisms across business development, credit underwriting, and post-lending management. For loans secured by vacant land, institutions must monitor the land development schedule and conduct a robust assessment of the reasonableness of construction plans to effectively mitigate credit risks.
     The FSC stated that it expects, through the regular announcement of primary examination findings and corrective actions, to help institutions stay abreast of supervisory priorities, proactively identify areas for improvement, reassess operational procedures, and establish appropriate control mechanisms, and achieve effective self-discipline and corrective action, ultimately promoting the sound operation of financial institutions and the development of the financial market.
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