IBK Takes Additional Authentication or Blocking Measures on 200,000 Suspicious Transactions; Prevented Losses Reach KRW 375.3 Billion

Last year, FDS took action on 204,459 cases, up 22.9% year over year
KRW 375.3 billion in losses prevented... Not an estimate of actual fraud losses
As discussions continue on a “no-fault liability system” for financial companies, the importance of early fraud detection is growing

Industrial Bank of Korea (IBK) took additional authentication or transaction-blocking measures on more than 200,000 suspicious transactions last year through its Fraud Detection System (FDS), according to a report. The amount attributed to fraud losses prevented was KRW 375.3 billion. As discussions continue on strengthening financial companies’ liability for voice phishing losses, banks’ ability to detect and block fraudulent transactions before they occur is emerging as a key challenge.

According to IBK on October 21, the number of cases in which additional authentication was required or transactions were blocked through its FDS reached 204,459 last year. That was up 22.9% from 166,381 in 2024 and nearly double the 104,021 recorded in 2023.

FDS analyzes access information and transaction records generated during electronic financial transactions in real time to detect abnormal or suspicious activity. When a suspicious transaction is identified, the system requires additional identity verification or blocks the transfer to prevent the unauthorized outflow of customers’ funds. IBK operates the system to prevent electronic financial incidents, including unauthorized transfers by third parties.

The amount attributed to losses prevented under the FDS rose from KRW 124 billion in 2023 to KRW 204 billion in 2024 and KRW 375.3 billion last year. The increase last year was 84.0%. However, this figure is calculated based on the balance in demand deposit accounts when action was taken; it is not an estimate of the amount of fraud losses that would actually have occurred.

The government and political circles have recently been discussing measures to strengthen financial companies’ responsibilities for preventing and compensating victims of financial fraud, including voice phishing. At the National Assembly Political Affairs Committee’s parliamentary audit of the Financial Services Commission on October 8, the need to introduce a no-fault liability system for financial companies was raised. Under this system, financial companies would be required to compensate victims for losses up to a certain amount, even if the companies were not at fault. Financial Services Commission Chairman Lee Eogwon also said that day that he would review ways to design a no-fault liability system so that financial and telecommunications companies would take greater responsibility for preventing losses.

Financial authorities are also working to strengthen systems for detecting fraud in advance. On October 6, they called on financial companies to step up FDS monitoring to prevent secondary harm following the leak of personal information in the financial sector. They instructed the companies to enhance monitoring and additional identity verification for high-risk transactions, such as non-face-to-face loans, account openings, and large transfers made in the names of customers whose information had been leaked.

Efforts to combine information from telecommunications and investigative agencies with transaction data from banks are also expanding. In August, financial authorities began fully operating a system to share information on suspicious activity from telecommunications and investigative agencies through ASAP, an artificial intelligence (AI) platform for sharing and analyzing voice phishing information. The aim is to identify risks that may be difficult to detect using an individual bank’s transaction data alone by combining it with information from other agencies.

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