Seven major financial companies reduced their information protection budgets this year from a year earlier, even as hacking attacks targeting the financial sector continue. Major commercial banks including Woori Bank and Shinhan Bank cut their security budgets by more than 10%.
According to data submitted by financial authorities to Rep. Park Sung-hoon of the People Power Party, a member of the National Assembly’s National Policy Committee, seven of the 20 financial companies with the most computer system failures in recent years scaled back their information protection budgets this year from the previous year. Park released the data on the 10th.
The 20 companies surveyed were Standard Chartered Bank Korea, Toss Bank, KakaoBank, Suhyup Bank, Kakao Pay Securities, KB Kookmin Bank, Toss Securities, the Korea Federation of Savings Banks, Shinhan Bank, Citibank Korea, Lotte Card, Woori Bank, Shinhan Securities, Samsung Securities, Woori Card, Hana Card, K Bank, Korea Development Bank, Hanwha Life Insurance and Lotte Non-Life Insurance.
Woori Bank made the deepest cut. It lowered its information protection budget to 61.566 billion won this year from 78.659 billion won last year, a decline of 21.7%. That amounts to a reduction of about 17.1 billion won in a single year.
Citibank Korea cut its budget 18.0% to 7.297 billion won this year from 8.899 billion won last year. Shinhan Bank reduced its budget 10.4% over the same period to 40.591 billion won from 45.294 billion won.
Hanwha Life Insurance (-2.8%), Korea Development Bank (-2.2%), K Bank (-1.7%) and Standard Chartered Bank Korea (-0.9%) also trimmed their information protection budgets. Six of the seven companies that cut spending were banks.
Execution rates for last year’s security budgets were also low. The 20 companies surveyed spent an average of just 69.6% of their information protection budgets last year, and 11 of them came in below 80%. Woori Bank spent 53.8% of its information protection budget last year, while KB Kookmin Bank spent 58.1% and Shinhan Bank 69.9%.
With a string of recent hacking incidents in the financial sector raising the need for stronger security systems, some companies are instead reducing related spending, prompting concerns that their capacity to respond to cyber threats could weaken.
“While the public’s financial information was exposed to attacks by hackers, financial companies failed to properly spend even their security budgets, and financial authorities cannot escape criticism that they stopped at perfunctory inspections,” Park said. “Rather than coming up with belated measures every time an incident breaks out, authorities should conduct a full review of security investment and vulnerability management, and clearly assign responsibility to the financial companies and supervisory authorities where lax management is confirmed.”
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