Cybersecurity stocks surge as AI-assisted hacking hits South Korean banks

Cybersecurity stocks surged across South Korea's stock market Tuesday as a string of hacking attacks on financial institutions — including indications that AI tools were used — drove expectations of a broad expansion in security spending.

On the Kosdaq, major security firm AhnLab closed up 15.58 percent at 89,000 won ($66), while Genians jumped 20.83 percent to close at 24,650 won, with both stocks hitting their highest levels of the year.

SandsLab hit the daily price limit, closing at 8,970 won, and RaonSecure surged 29.98 percent to 14,870 won, also reaching its upper limit. Fasoo AI (up 15.60 percent), SGA Solutions (15.61 percent), Monitorapp (11.23 percent) and Axgate (9.10 percent) also posted strong gains.

The rally came after a series of personal data breaches linked to hacking attacks struck major financial institutions in recent weeks, including Shinhan Bank, KB Kookmin Bank, Hana Bank and BNK Busan Bank, as well as savings banks Yeagaram and Welcome, and Hyundai Capital Services. Financial regulators believe the attackers used AI tools to automate coordinated strikes against multiple institutions simultaneously.

Unlike conventional attacks that directly extract database files, the intrusions reportedly involved accessing web pages and servers to retrieve large volumes of customer data. Financial authorities launched emergency inspections across the entire financial sector, examining identity verification systems, access controls and security vulnerabilities.

Market analysts are watching whether the incident will prompt broader security investment beyond the financial sector, extending to public institutions and private companies. They note that if AI-assisted cyberattacks continue to spread, demand for security solutions to shore up existing defenses could rise significantly.

"There is a high likelihood that the public sector will recognize the seriousness and importance of cybersecurity and move to expand its countermeasures," said Kwon Myung-jun, a researcher at Yuanta Securities Korea. "The seasonal tailwind of the fourth-quarter peak period, combined with these incidents, will keep attention on cybersecurity companies."

President Lee Jae-myung also weighed in Tuesday, ordering officials to act swiftly in response to the hacking attacks on financial and public institutions. "Promptly inspect the security systems across all critical national infrastructure and immediately implement the necessary security measures," he said.

Lee issued the directive at a Cabinet meeting he chaired at Cheong Wa Dae, saying, "Personal data breaches at financial and public institutions have been occurring one after another. In particular, there are signs that AI was used in some of the hacking cases, which has caused great concern and anxiety among the public."

Police also formally opened an investigation Tuesday into the series of AI-assisted hacking attacks on financial institutions. The Korean National Police Agency's National Investigation Headquarters said it had booked the case as a violation of the Act on Promotion of Information and Communications Network Utilization and Information Protection after verifying the objective facts of the incidents. Given the gravity of the case, the agency designated its Cyber Terror Investigation Unit as the dedicated investigative team, appointing a senior superintendent as team leader and assigning 28 officers to the investigation.