Financial authorities check contingency plans after Kakao fiasco

The headquarters of the Financial Services Commission (FSC) in central Seoul / Yonhap

FSC, FSS prepare next week's annual parliamentary audit sessions on Kakao crash

By Anna J. Park

Financial authorities have ordered emergency inspections on financial firms' contingency plans, aiming to prevent similar incidents following the recent KakaoTalk service outage.

According to the Financial Services Commission (FSC) Wednesday, Chairman Kim Joo-hyun urged the top financial regulator to identify any advance measures the local financial sector needs to address.

“The FSC looks into potential risks of any financial system failures in case of sudden accidents, as it plans to fully grasp what specific measures the FSC can take in such contingency cases,” an official from the FSC explained.

Financial Supervisory Service (FSS) Governor Lee Bok-hyun also ordered the watchdog agency to conduct similar emergency check-ups on financial companies' contingency plans. During Tuesday's meeting with executive members, Lee asked the FSS to go ahead with the examinations on contingency plans in case of computer system or telecommunications malfunctions.

“It aims to thoroughly understand how financial firms' data servers are managed, and how companies' contingency plans are being prepared and set up,” an official from the FSS said.

In addition, the FSS is currently looking into Kakao-affiliated financial companies' detailed responses in a timeline during the past few days, following KakaoTalk messenger's sudden crash on Saturday. The financial authority aims to determine whether the firms followed their previously-set contingency plans.

Such check-up orders from both the FSC and FSS seem also to be in line with their preparation for annual parliamentary audit sessions on the two financial authorities, which are slated to be held in the next week. National Assembly's National Policy Committee, a sub-committee of the parliament that oversees the financial sector, is scheduled to hold annual audit sessions of the FSC and FSS next Monday.

Following the sudden freeze of KakaoTalk messenger on Saturday afternoon, the FSS immediately asked Kakao-affiliated financial companies, including KakaoBank, Kakao Pay and Kakaopay Securities, to promptly receive financial consumer complaints related to the incidents. The FSS said it would closely monitor whether the consumers who reported complaints would be compensated reasonably at an appropriate time.