[2022 National Audit] 421 Electronic Financial Incidents at Commercial Banks... Recovery Takes Over a Month

[Asia Economy Reporter Song Hwajeong] Amid the chaos caused by the KakaoTalk service outage on the 15th, it has been revealed that electronic financial accidents at financial institutions are also occurring frequently, raising urgent calls for countermeasures.

According to data submitted by the Financial Supervisory Service to National Assembly member Yang Jeongsuk of the Political Affairs Committee on the 19th, a total of 421 electronic financial accidents occurred from 2017 to July 2022 at 13 banks in South Korea, including commercial banks, specialized banks, and internet banks. Among these, 28 incidents lasted more than a full day.

The number of incidents at six commercial banks?Kookmin, Woori, Shinhan, Hana, SC, and Citi?totaled 247 cases. This accounts for 58.6% of all incidents, averaging 41 electronic financial accidents per bank.

Among commercial banks, Woori Bank had the highest number of incidents at 72, followed by Shinhan Bank with 44, SC First Bank with 43, Hana Bank with 34, Kookmin Bank with 31, and Citi Bank with 23. In response, Woori Bank explained, "About 60% of the 72 system incidents occurred during the introduction of the next-generation system in 2018, and considering the uniqueness of replacing the entire bank system, the level is similar to other banks. Currently, Woori Bank's IT system is being operated and managed stably."

Internet banks K Bank, KakaoBank, and Toss Bank experienced a total of 105 incidents, averaging 35 incidents per bank. Individually, KakaoBank had the most with 52 incidents, followed by K Bank with 37, and Toss Bank with 16. However, Toss Bank's figure is relatively high considering it has been operating for less than two years from 2021 to July 2022.

Specialized banks?Industrial Bank of Korea, IBK Industrial Bank, NH Nonghyup Bank, and Suhyup Bank?recorded a total of 69 incidents, averaging 17 per bank. Although the total number of incidents was relatively low among specialized banks, Industrial Bank of Korea accounted for 32 incidents, representing 46.3% of the total, making it the most frequent.

The total number of incidents by year increased from 68 in 2017 to 107 in 2018, a 57.3% rise, then decreased to 54 in 2019, but has been rising again since 2020. In 2020, there were 67 incidents, about 15% more than the previous year, increasing again to 76 in 2021, and 49 incidents were recorded up to July this year, suggesting a further increase compared to last year.

Member Yang Jeongsuk pointed out, "The reason why electronic financial accidents at banks are not decreasing but increasing every year is likely due to insufficient strong sanctions and preventive measures after incidents occur," criticizing the lack of effective post-incident measures.

Of the total 421 incidents, 393 cases (93.3%) were resolved within 24 hours, while 28 cases (6.7%) took longer than 24 hours, which is relatively few.

However, among the 28 incidents that took more than 24 hours, 20 occurred at commercial banks, accounting for the majority, with Woori Bank alone responsible for 12 cases, or 60% of the total. The remaining 8 cases were 5 at specialized banks and 3 at internet banks.

Among the 28 incidents lasting more than 24 hours, 6 lasted more than 10 days. Woori Bank had 2 such cases, while Kookmin Bank, Hana Bank, Suhyup Bank, and KakaoBank each had one.

Notably, Woori Bank's 2018 internet banking mass unauthorized access incident caused by an information leak took 33 days to recover, marking the longest recovery time. Hana Bank also experienced a 27-day recovery period in 2017 due to a program error that caused interest rate reduction omissions.

This year, there were 4 incidents in total. In June, Suhyup Bank experienced an incident where program errors caused undercalculation of interest payments, taking 12 days to recover. Additionally, in 2020, KakaoBank had a postpaid transportation card function failure caused by external factors, which took 16 days to recover, marking it as a long-term recovery incident.

Member Yang stated, "If banks stop, South Korea's economic system shuts down," emphasizing, "Frequent electronic financial accidents at banks inevitably cause public anxiety." She added, "Bank incidents continue every year, and the inconvenience to the public during recovery periods that can last over a month is immeasurable. It is crucial for the Financial Supervisory authorities to ensure proper compensation for damages suffered by the public and to establish firm measures to prevent recurrence."

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