FSS Notifies KakaoBank to Improve Anti-Money Laundering Controls

[Asia Economy Reporter Kiho Sung] The Financial Supervisory Service (FSS) has determined that KakaoBank's suspicious transaction reporting is inadequate and has requested improvements.

According to the financial sector on the 12th, the FSS recently notified KakaoBank of three areas for improvement: inadequate operation of suspicious transaction reporting, unreasonable evaluation of money laundering risks for new products, and unreasonable operation of customer identification procedures.

KakaoBank operates a Fraud Detection System (FDS) to monitor abnormal transactions by department, but it only monitored overseas remittances based on domestic remittance standards. It was also found that transaction alerts for suspicious split remittances were insufficient.

There was also criticism for excluding suspicious transaction reports without verifying remittance-related supporting documents for customers who excessively sent overseas remittances under the pretext of overseas living expenses.

Concerns were raised that the review of suspicious transaction extraction criteria for new products was not conducted as required, potentially leading to negligence in monitoring suspicious transactions for new products.

Regarding customer identification procedures, it was pointed out that regulations requiring corrections for customers whose information, such as English names and detailed addresses, need to be updated should be clearly followed.

This content was produced with the assistance of AI translation services.