[Exclusive] Embezzlement and Breach of Trust of 112.5 Billion Won Across Financial Sector... 5.5 Times Increase Compared to Previous Year

The Financial Supervisory Service Also Sharpens Internal Control 'Blade' This Year

[Asia Economy Reporter Bu Aeri] The amount related to embezzlement and breach of trust incidents that occurred across the financial sector last year increased more than fivefold compared to the previous year. In particular, embezzlement and breach of trust incidents repeatedly occurred mainly in the banking sector, and the same issues consistently arose in the insurance industry.

According to the Financial Supervisory Service’s “Details of Embezzlement and Breach of Trust Incidents by Employees in Domestic Financial Sectors” received by Asia Economy on the 10th through the office of Park Jae-ho, a member of the National Assembly’s Political Affairs Committee from the Democratic Party of Korea, the total amount of embezzlement and breach of trust in the financial sector?including banks, insurance companies, and securities firms?last year reached 112.4586 billion KRW. This is about 5.5 times higher than the previous year (20.6107 billion KRW).

By sector, the scale of embezzlement in the banking sector last year was the largest at 72.4658 billion KRW, and the amount related to breach of trust was also the largest at 12.9785 billion KRW. Next, the securities and futures industry recorded breach of trust incidents amounting to 11.315 billion KRW last year, making it the second largest in terms of embezzlement and breach of trust amounts after the banking sector.

In the savings bank sector, embezzlement incidents amounting to 7.8833 billion KRW occurred last year. There have been no breach of trust incidents in savings banks since 2018. Asset management companies also experienced embezzlement incidents worth 5.767 billion KRW and breach of trust incidents worth 360 million KRW.

Embezzlement and breach of trust incidents have consistently occurred in the insurance industry as well. The scale of embezzlement incidents in insurance companies reached 818 million KRW, and the amount related to breach of trust was 76 million KRW. In the credit industry, embezzlement amounted to 787 million KRW last year, and breach of trust was 8 million KRW.

As large and small financial incidents involving employees continued, such as a 70 billion KRW embezzlement by a Woori Bank employee and a 12 billion KRW breach of trust by a Kookmin Bank employee last year, the Financial Supervisory Service has also stepped up efforts to strengthen internal controls within financial companies.

The Financial Supervisory Service plans to expand the evaluation weight of internal control sections during management performance assessments and to revise the evaluation criteria in detail within the first half of this year. In addition, it intends to establish a timely response system for financial incidents by conducting on-site inspections of large-scale financial accidents and preparing countermeasures for new types of financial incidents, maintaining continuous response efforts.

Assemblyman Park stated, "Embezzlement and breach of trust incidents by employees across the financial industry, which is based on trust, must be eradicated," and added, "It is now necessary to inspect internal controls throughout the financial sector as well as review the investigation and inspection systems of financial authorities."

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