Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
Korea Federation of Banks chief warns of cyber risks amid digitalization
Korea Federation of Banks (KFB) Chairman Kim Gwang-soo speaks during an online conference held at the KFB headquarters in Seoul, Thursday. Yonhap
By Yi Whan-woo
Kim asks presidential candidates to rectify 'uneven playing field' between banks and big tech firms
By Yi Whan-woo
Cyber risks could be a “gray rhino” for banks on their paths for digital transformation, and they should take preventive measures, just as they do concerning other forthcoming financial risks, Korea Federation of Banks (KFB) Chairman Kim Gwang-soo said Wednesday.
The head of the KFB also asked presidential candidates to rectify “the uneven playing field” between commercial banks and big tech companies in their campaigns for the March 9 presidential election.
Kim called on the need to open the door wider for lenders to advance into non-banking sectors, and to open up access to them to non-financial data in the government-led MyData project.
“The banking industry should be ready to counter 'gray rhinos,' as has been recently indicated by the financial regulator, and in relation to that, cyber risks should not be overlooked,” Kim said during an online press conference in the lead up to the Lunar New Year holiday.
Kim referred to Financial Services Commission (FSC) Chairman Koh Seung-beom's remark weeks earlier, that the potential risks likened to “gray rhinos” have become reality one by one.
A “gray rhino” is a highly probable, high-impact, yet neglected threat. For Koh, the warning was believed to be linked to the accelerated pace of the U.S. Fed's tapering, China's economic slowdown, the Washington-Beijing trade row and other risks that do not necessarily center on digitalization.
The KFB chief stressed that the unprecedented banking environment, with the emergence of the metaverse and cryptocurrency, among others, powered by digital technology, could “result in unpredictable cyber risks.”
Concerning the digital battle between banks and big tech firms in the platform business, Kim said the current regulations make it difficult for the lenders to compete on an equal footing, and that they should be revised.
He pointed out that the big tech firms can advance into the banking business and collect relevant data, while the banks are restricted from stepping into non-banking sectors.
He said such unfair parameters can be seen with regards to MyData, which has been offering beta services since December.
The government-led project is aimed at allowing licensed service providers to collect and analyze personal data scattered across the finance sector. This is another area where banks and big tech firms are anticipated to compete.
“The uneven playing field is attributed to the banks' weaker competence when it comes to data, and therefore should be rectified.”
Asked about whether the banks should return their hefty profits stemming from interest rate hikes supposedly geared toward reducing inflation during the pandemic, Kim said he will “consider measures that satisfy both the public interest and profitability.”
Concerning the closure of many bank branches, he said it is an irreversible trend due to digital banking. He said several measures are under review to offer services to senior citizens who find digital banking difficult.
Among these measures are running a joint retail location among banks and forming partnerships with convenience stores to offer banking services.
Formerly the chairman of NH Financial Group, Kim took office in December 2020 with a three-year term.