South Korean Bank CEOs Summoned Over Customer Data Cyberattacks
Parliamentary Summons Approved
The National Assembly's National Policy Committee approved the summons for CEOs of KB Kookmin, Shinhan, Hana, Woori and NH NongHyup banks to appear at an audit of the Financial Supervisory Service on Monday. [1] Chiefs of five major South Korean commercial banks will attend a parliamentary audit on Monday to face questions over a wave of cyberattacks that exposed customers' and employees' personal data. [1] The National Assembly's National Policy Committee approved a motion on Oct. 8 to summon KB Kookmin Bank CEO Lee Hwan-ju, Shinhan Bank CEO Jung Sang-hyuk, Hana Bank CEO Lee Ho-sung, Woori Bank CEO Jung Jin-wan and NH NongHyup Bank CEO Kang Tae-young as witnesses for an audit of the Financial Supervisory Service. [1] It marks the first time since 2022 that the heads of all five major banks have been summoned at a parliamentary audit. [1][5]
Scale of the Cyberattacks
Shinhan Bank suffered the largest disclosed breach, affecting about 25,000 customers. [1] KB Kookmin Bank had a leak involving 119 people including 99 customers and 20 employees. [1] Hana Bank saw 89 customers affected. [1] Woori Bank and NH NongHyup Bank faced similar attacks but reported no data breaches. [1] The audit is expected to focus on a recent spate of cyberattacks targeting local banks and their responses. [1][3]
Shinhan Bank's Security Spending Under Scrutiny
Shinhan Bank's cybersecurity budget of 40.59 billion won this year is down 10.4 percent from last year and is the lowest among the five major banks. [1] Shinhan Bank's cybersecurity budget is likely to come under fire at the audit, as the bank suffered the most severe attack and spent the least on security among the five major lenders. [1] Shinhan earmarked 40.59 billion won for information security this year, down 10.4 percent from a year earlier, according to Financial Supervisory Service data released Friday by Rep. Park Dae-chul of the opposition People Power Party. [1] It was the only one of the five major banks to allocate less than 50 billion won. [1][5]
Impact on CEO Reappointments
The audit will also examine the reappointment prospects of the five CEOs, whose terms expire on Dec. 31, amid the hacking incidents and an ongoing Financial Supervisory Service investigation into the banks' internal controls. [1] The reappointment of the five major banks' CEOs is also expected to draw attention at the audit. [1] All five chiefs' terms expire on Dec. 31, with four facing their first reappointment, while Shinhan Bank CEO Jung, who took office in 2023, is approaching the end of his second term. [1] The CEOs of Shinhan, KB Kookmin and Hana banks were expected to secure relatively smooth reappointments on the back of strong earnings. [1] However, the recent hacking incidents could complicate their chances. [1] With the watchdog FSS investigating the circumstances of the incidents and the banks’ internal control systems, the findings could potentially affect the reappointments of the bank chiefs. [1][4]
Broader Context of Bank Leadership Reviews
The previous 2022 parliamentary audit focused on embezzlement and internal controls, providing background for the current scrutiny. [1] It marks the first time since 2022 that the heads of all five major banks have been summoned at a parliamentary audit, when embezzlement and internal control failures came under scrutiny. [1][5]
What to watch next: The parliamentary audit on Monday will examine the banks' responses to the cyberattacks along with the reappointment prospects of the five CEOs whose terms expire on Dec. 31, with findings from the ongoing FSS investigation into internal controls potentially affecting those decisions. [1]
