Top bank chiefs face grilling over cyberattacks

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.

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.

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.

The audit is expected to focus on a recent spate of cyberattacks targeting local banks and their responses.

Shinhan Bank suffered the largest disclosed breach, affecting about 25,000 customers, followed by data leaks at KB Kookmin Bank, involving 119 people, including 99 customers and 20 employees, and Hana Bank, affecting 89 customers.

Woori Bank and NH NongHyup Bank also faced similar attacks, but the incidents did not result in data breaches.

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.

Shinhan earmarked 40.59 billion won ($30.5 million) 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. It was the only one of the five major banks to allocate less than 50 billion won.

The reappointment of the five major banks' CEOs is also expected to draw attention at the audit. 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.

The CEOs of Shinhan, KB Kookmin and Hana banks were expected to secure relatively smooth reappointments on the back of strong earnings. However, the recent hacking incidents could complicate their chances.

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.