Financial institutions 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.

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. 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, the Export-Import Bank of Korea, the Industrial Bank of Korea, Nonghyup Bank, Suhyup Bank, 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-bankdepository 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. 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, creditspecialized 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.

Financial Institutions in Korea(as of end-February 2018)