[1mm Finance Talk] Hacking Threat Spreads to Primary Banking Sector... Regulators Bolster Staff and Organization for All-Out Defense

Retaining electronic finance department heads to ensure preparedness, but
AI hacking is growing more sophisticated, making incident response harder
Security is an "investment"... A system for continuous response is needed

Hacking threats leveraging artificial intelligence (AI) have spread to the primary banking sector. Although financial authorities have strengthened their supervisory organizations and heightened their state of alert in response to growing cyber threats, some financial companies have failed to fend off increasingly sophisticated external intrusions. As financial companies' security awareness and investment remain inadequate while AI hacking techniques evolve rapidly, calls are growing for executives to strengthen security capabilities, treating security as an "investment" rather than a "cost."

Financial Supervisory Service Governor Lee Chanjin enters the launch meeting of the Financial Consumer Protection Policy Evaluation Committee at the Government Complex Seoul in Jongno-gu, Seoul, on the 29th. Yonhap News

According to the financial sector on October 9, financial authorities and companies are taking hacking incidents at major commercial banks, including Shinhan Bank, KB Kookmin Bank, and Hana Bank, more seriously than the information technology (IT) incidents centered on the secondary financial sector in the second half of 2025. Last year, various types of security incidents occurred across the financial sector, including external attacks on Welcome Savings Bank, SGI Seoul Guarantee, and Lotte Card, as well as an information leak caused by an internal employee at Shinhan Card. Even so, there was a strong perception that the primary banking sector was a safe zone, with comparatively stronger internal controls and security systems. That perception has now been shaken, as information leaks have occurred one after another at major commercial banks as well.

The widespread adoption of AI is heightening the sense of crisis. Hackers are using AI in their attacks, making intrusion techniques more sophisticated and expanding the areas that need to be defended. Critics have also pointed out that the financial sector has historically treated security as a cost, focusing on the security of core networks while neglecting to manage "weak links," such as peripheral systems that are relatively vulnerable. As attack methods evolve rapidly, the ability not only to block attacks in advance but also to detect abnormal signs early and prevent damage from spreading has become increasingly important.

As concern grows across the financial sector, attention is also turning to the electronic financial supervision framework that the Financial Supervisory Service (FSS) overhauled last year. After taking office, FSS Governor Lee Chanjin retained the heads of the IT Inspection Bureau, the Electronic Financial Supervision Bureau, and the Electronic Financial Inspection Bureau in his first round of appointments for department heads at the end of last year, prioritizing continuity in their work. After expanding the organization responsible for electronic finance in the wake of the 2024 TMON-WeMakePrice (TMEP) settlement crisis, the FSS retained the heads of key departments despite a series of security incidents last year, maintaining its ability to respond to pressing issues. At the time, the FSS said, "For departments that need to respond promptly to financial issues, we will retain the existing department heads to ensure continuity in their work and strengthen our ability to address current issues."

Although some financial companies failed to fend off external intrusions in these attacks, the financial authorities' decision to prioritize continuity in their work through personnel appointments has been credited with helping them quickly assess and respond to the situation after the incidents. One financial sector official said, "As AI is used in hacking, new security threats are increasing, and it is becoming more difficult to completely block every attack. If a large number of department heads had been replaced, it might have taken longer to assess the initial situation and take follow-up measures in this latest incident."

As attackers' weapons evolve with AI, financial companies on the defensive must also rapidly transform their security practices. The financial sector believes that the financial authorities need to continue easing network segregation regulations to expand the use of AI in security, while financial company executives must also shift their mindset and view security as a core investment rather than a mere cost.

Some argue that eliminating the "regulatory arbitrage" surrounding information leaks is necessary to encourage financial companies to invest in security. Under the current Credit Information Use and Protection Act, the financial authorities may impose a fine of up to 5 billion won for a leak of personal credit information resulting from a breach of security obligations. By contrast, the Personal Information Protection Act calculates fines for personal information violations based on revenue. Since September, penalties have been strengthened to allow fines of up to 10% of total revenue for serious violations, including repeated or intentional large-scale personal information leaks and those caused by gross negligence.

In fact, fines amounting to hundreds of billions of won have been imposed on telecommunications companies and big tech firms, sparking controversy over whether the penalties are appropriate. Compared with these cases, some say the financial sector's system of penalties for information leaks also needs to be improved. The financial authorities have also pursued institutional reforms, including a plan to impose punitive fines on financial companies involved in serious incidents caused by inadequate security systems.

There are calls for financial companies to increase information security budgets and continually expand their pool of specialists, particularly because hacking incidents at financial firms can lead to direct financial losses, such as voice phishing and other financial fraud, if customers' financial and credit information is leaked.

Yeom Heungyeol, a professor in the Department of Information Security at Soonchunhyang University, emphasized, "Because incidents in the financial sector can cause immediate financial losses, a higher level of security management is essential than in other industries. Financial companies must secure sufficient personnel and increase investment to continually improve systems for regularly checking information system vulnerabilities and establishing appropriate security measures."

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