South Korea to Hold Financial Firms Liable for Online Hacking Issues

Strategic Insights -

The South Korean government plans to revise legislation to hold financial institutions accountable for client inconveniences arising from internet hacking or other technical issues. This change is expected to be implemented in the second half of next year, although the exact timeline is still unclear. The Finance Ministry has already drafted a related bill, which it intends to resubmit to the National Assembly next month. The proposed law would require financial companies or electronic banking operators to take responsibility if online banking difficulties occur due to hacking or other problems, unless there is a contract specifying that users are liable in such cases.

Key Takeaways:

  • The South Korean government aims to revise the current legislation to hold financial institutions accountable for client inconveniences arising from internet hacking or other technical issues.
  • The proposed law would require financial companies or electronic banking operators to take responsibility for online banking difficulties caused by hacking or other problems.
  • Financial firms would be immune from liability if there is a contract clarifying that online banking users are responsible in case of such problems.
  • The proposed change is expected to be implemented in the second half of next year, although the exact timeline is still unclear.
  • The government plans to resubmit the related bill to the National Assembly next month.
  • The current law has been deemed inadequate in the face of increasing online banking transactions and electronic financial transactions.
  • As of the end of June, 31% of financial transactions were made via bank tellers, while Internet banking and tele-banking accounted for 25.7% and 13.2%, respectively.

Statistics:

  • 31% of financial transactions were made via bank tellers as of the end of June.
  • 25.7% of financial transactions were made via Internet banking as of the end of June.
  • 13.2% of financial transactions were made via tele-banking as of the end of June.
  • Online stock market transactions increased from 25.4% in 1999 to approximately 60%.

Sources:

  • (Yonhap)
  • Finance Ministry officials (cited in Yonhap)