Impact of Declining Voice Phishing Losses?… Compensation Insurance Subscriptions Stall

Subscription Declines for Second Year at Four Major Banks
Nonghyup Sees 114,000 New Subscriptions in First Half as a Late Entrant
Compensation Insurance Usage Expected to Expand if No-Fault Liability System Is Introduced

It has been revealed that bank customers’ enrollment in 'voice phishing compensation insurance' policies has seen little increase. However, if discussions in the National Assembly regarding the introduction of a no-fault liability compensation system for voice phishing gain momentum in the second half of the year, financial companies could face higher compensation burdens, prompting the banking sector to take a more proactive approach toward supporting compensation insurance.

According to the financial industry on September 9, the number of voice phishing compensation insurance enrollments at the four major banks—KB Kookmin, Shinhan, Woori, and Hana Bank—actually decreased from 16,268 policies in 2024 to 14,707 policies in 2025. In the first half of this year, only 5,659 policies were issued, which, if simply extrapolated on an annual basis, would amount to just 11,318 policies. If this trend continues, the total enrollments for the four major banks could fall below last year's figures.

This slow growth in voice phishing compensation insurance enrollment is attributed to the fact that these policies are offered mainly as free supplementary services. Without active promotion and encouragement from the banks, it is difficult for enrollment numbers to continue rising.

In particular, as the overall scale of voice phishing incidents has recently decreased, consumers may feel less need to purchase such insurance. According to the Financial Services Commission, the number of voice phishing cases dropped by 39.9%, from 20,900 in the period from October 2023 to July 2024, compared to the previous year, to 12,554 cases for the same period from October 2024 to July 2025, after the implementation of the comprehensive measures to eradicate voice phishing announced last year. During this period, the total damages also decreased by 43.2%, from 1.1137 trillion won to 632.4 billion won.

On the other hand, NH Nonghyup Bank, which entered the voice phishing compensation insurance business this year as a latecomer, has been recording rapid growth in enrollments. In the first half of 2025 alone, it achieved 114,780 policy enrollments, far surpassing the total annual enrollments of the four major banks last year.

Voice phishing compensation insurance is a product that covers financial losses resulting from voice phishing or messenger phishing. Banks commonly cover the insurance premiums and support customers in enrolling free of charge, with some products offering compensation of up to 10 million won. Some banks extend free enrollment especially to seniors and recipients of basic pensions, targeting financially vulnerable groups. The coverage period is typically one year from the date of enrollment.

Some banks have been supporting free compensation insurance enrollment for financially vulnerable groups since around 2024. As voice phishing tactics become more sophisticated and high-value damages increase, financial companies have begun utilizing such insurance to strengthen their consumer protection and compensation functions.

There are expectations that, as discussions in the National Assembly regarding a no-fault liability compensation system for voice phishing are likely to resume in the second half of this year, the banking sector may become more proactive in supporting compensation insurance. This outlook is supported by the administration and the ruling party's stated commitment to actively discuss introducing the no-fault liability system, with financial authorities also considering its implementation a key task. A related bill is currently pending in the National Assembly.

The no-fault liability system would require financial institutions to compensate victims of voice phishing within a certain scope, even if the institution was not at fault or negligent. If implemented, this could significantly increase the compensation burden on financial companies in relation to voice phishing. However, utilizing compensation insurance would allow financial institutions to share these costs with insurance companies, thereby reducing their direct expenses.

An official from a major commercial bank stated, "Compensation insurance serves as both a way to make victims whole and a means of distributing the compensation burden for financial institutions, so it is likely to be more widely utilized in the future."

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