Plans to raise next year’s budget by 15% to around 110 billion wonFinancial firms once reluctant to increase contributions now support a budget hikeStrengthening AI detection and defense; expanding security support for smaller firms
As artificial intelligence (AI)-powered hacking threats targeting the financial sector intensify, the Financial Security Institute’s budget for next year is expected to exceed 100 billion won for the first time. The institute, which has played a key role in identifying signs of breaches and preventing damage from spreading in a series of recent hacking incidents in the financial sector, plans to expand investment in building AI-powered detection and defense systems.
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According to financial industry sources on October 19, the Financial Security Institute’s board recently discussed a plan to set next year’s budget at around 110 billion won, up 15% from this year, to expand investment in AI security. That would exceed this year’s budget growth rate of 10%.The main focus of next year’s budget increase is expanded investment in AI security. The institute plans to significantly increase its “AI budget,” including costs to build systems for introducing AI into key functions such as security checks and monitoring, as well as fees for AI services. The institute’s budget is funded by financial companies, including banks, through contributions. Financial companies, which have been reluctant to increase their contributions, are reportedly now taking a positive view of a budget increase as a series of hacking incidents has underscored the need for greater investment in security.Recently, a series of attacks in the financial sector have targeted external systems linked to financial services, which are relatively vulnerable to security threats. Notable examples include last month’s hacking incidents targeting “weak links” in financial services, such as Shinhan Bank’s loan agent access system and the merchants of payment gateway (PG) provider Toss Payments. Concerns are growing that even if financial companies strengthen their internal security networks, a breach at an external access point could lead to a major incident, such as the leakage of customer information. In particular, there are concerns that AI agents may be used to exploit security vulnerabilities in existing systems, automating attacks and making them faster. This has prompted calls for an urgent overhaul of security response systems.In response, the Financial Security Institute plans to accelerate the development of a proactive defense system under the principle of “using AI to defend against AI.” It will strengthen its detection and response capabilities by using AI to identify potential security vulnerabilities in advance and by monitoring systems in real time to detect anomalies early. The institute plans to bring its AI-powered security system into full operation starting in January 2027, with the goal of establishing a prevention-focused security system that detects and blocks intrusion attempts early, rather than responding only after an incident has occurred.The scope of support is also expected to expand. The institute plans to extend security checks and vulnerability remediation support beyond banks, securities firms, insurers and credit card companies to include smaller financial companies, such as savings banks and general agencies (GAs) for corporate insurance. With financial systems closely interconnected, a security vulnerability at an individual financial company could become a risk to the entire sector. The aim is to strengthen defenses at relatively vulnerable institutions and raise security standards across the financial sector.The institute will also continue to expand its security workforce. After hiring 15 people last year and 30 this year, it plans to recruit around 20 more next year. However, rather than relying solely on expanding its workforce, it is prioritizing greater investment in AI technology to improve the efficiency of its security response.As the Financial Security Institute takes on a growing role as a “shared shield” for the financial sector, its budget proposal for next year is scheduled to be finalized in December after completing the relevant procedures, including approval by member institutions and the board.
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Meanwhile, the recent series of hacking incidents in the financial sector is expected to be a key issue at the National Assembly Political Affairs Committee’s parliamentary audit of the Financial Supervisory Service, which is being held today. Financial Security Institute President Park Sangwon will appear as a witness, along with the heads of the country’s five major banks: KB Kookmin Bank President Lee Hwanju, Shinhan Bank President Jeong Sanghyeok, Hana Bank President Lee Hoseong, Woori Bank President Jeong Jinwan and NH NongHyup Bank President Kang Taeyoung. They are expected to face intensive questioning about security investment and the state of internal controls. With the bank presidents’ terms set to end around year-end, there is also speculation that their handling of the parliamentary audit could affect their future positions.
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