Korean banks are stepping up cybersecurity to deal with crypto-related risks – Security Bitcoin News
South Korean banks are taking steps to take cybersecurity to a new level as they try to keep up with fintechs and tackle new threats arising from their interaction with the crypto space. A number of institutions are taking unprecedented measures, including the integration of blockchain technologies, Korean media reported.
South Korean banks are increasing cybersecurity to make digitization easier
Given the challenges posed by the digitization of the financial sector, commercial banks in South Korea are stepping up their efforts to improve security in cyberspace. According to a report by the Korea Herald, the move is an attempt to better compete with Korean fintech companies that are developing rapidly. The new requirement for lenders and crypto exchanges to work together on issuing real name accounts for merchants is another motive.
Woori Bank is one of the institutions that has taken extraordinary measures. On Monday, Woori announced the introduction of SOAR (Security Orchestration, Automation and Response), an advanced set of technologies that enable the automatic collection and storage of security data. The lender said the integration would allow it to update its cybersecurity platform and go beyond its previous surveillance-centric approach.
KB Kookmin Bank, another leading banking group in South Korea, is working on its own automatic cybersecurity system based on artificial intelligence. The project is part of its 551.9 billion won ($ 488.5 million) investment in IT services in 2021. The lender also uses technology from Korean startup Everspin to prevent phishing and fraud attempts using fake apps that target mimicking its mobile services.
Two other banks, Shinhan and Hana, have chosen to implement blockchain technologies that they hope will protect against hacking and reduce security gaps. Shinhan Bank has launched three blockchain-related services, including an identity verification service for its Sol mobile app. And Hana Bank has adopted blockchain technology in its Hana 1Q app, which helps customers manage their motorway toll payments.
Regulators are rejecting requests from banks to be exempted from cryptocurrency responsibility
Continuous efforts to improve cybersecurity in the banking sector have resulted in a 35.9% annual decrease in cyber attacks to 6.2 million cases by the end of 2020, the Korean Financial Security Institute announced last month. The Korea Herald cited industry watchers as saying that banks and other companies now need to constantly update their cybersecurity platforms in light of the new requirement for domestic crypto exchanges to partner with banks on introducing real name accounts for their users.
Banking institutions have been reluctant to get in touch with the Korean coin trading platforms fearing exposure to money laundering, hacking, fraud and other cryptocurrency-related risks. A June report indicated that Korean banks have asked regulators to be exempted from liability for this type of crime, committed by exchanging digital assets that they are required to scrutinize.
However, according to Arirang-cited sources in the country’s banking sector, the financial authorities have declined the banks’ requests to absolve themselves from guilt for such problems. In a recent interview with reporters, Korea’s Financial Services Commission (FSC) chairman Eun Sung-soo stressed that lenders have primary responsibility in the event money laundering occurs on a crypto trading platform they partner with.
The number of South Korean stock exchanges has risen to around 200. The rejection can lead to many closings as most of these platforms have not yet signed a partnership agreement with a local bank. It has been reported that only four major Korean platforms – Upbit, Bithumb, Coinone, and Korbit – are currently working with commercial banks to implement the real name account system. The provisions of the revised Special Fund Act that introduced the requirement will come into force in September.
Do you think Korean banks will eventually agree to offer services to more cryptocurrency exchanges? Do share your thoughts on the matter in the comments below.
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