By Na Jeong-ju
Financial service providers will be required to insure customers
accounts to cover financial damage caused by hackers and financial
accidents beginning next month, the Financial Supervisory Service (FSS)
The FSS will make it compulsory for banks to sign insurance contracts
that can cover financial damage of up to 2 billion won in the case of
hackers and electronic system breakdowns. The policy is in line with
toughened regulations on online financial transactions that will take
effect beginning January.
Commercial banks, the Industrial Bank of Korea and the National
Agricultural Cooperative Federation must provide insurance that covers
damage up to 2 billion won.
The Korea Development Bank, the Korea Post and the National Federation
of Fisheries Cooperatives must have insurance coverage of up to 1
billion won, while securities firms and stock-related financial firms
must have coverage of 500 million won. Insurance companies must have
policies that cover damages of up to 100 million won.
The government is moving to oblige financial institutions to compensate
consumers for virtually all financial losses from hackers intrusions
into online financial accounts and personal data.
Even if financial firms are not directly responsible for the hackers
damage, banks and non-banking institutions should compensate customers
for the damages from electronic break-ins.
The FSS believes the measure would alleviate fears of some 23 million
Korean e-banking, phone banking and automatic telling machine (ATM)
users over incurring monetary losses due to online identity theft,
account intrusion attacks and consumer personal information hacking.
Subscribe to InfoSec News