Banks logged 554 IT outages over 5 years, paying 110,000 customers W153.64m in compensation

More than 550 mobile and internet banking outages occurred at domestic banks over the past five years, with program errors accounting for more than half of the incidents and nearly 110,000 customers receiving compensation, data released Wednesday showed.

According to materials submitted to the National Assembly's Political Affairs Committee by the Financial Supervisory Service, a total of 554 mobile and internet banking outages were recorded at 19 domestic banks between January 2022 and August this year. The data was obtained by People Power Party lawmaker Park Sung-hoon.

By bank, SC First Bank recorded the most outages at 83. Toss Bank followed with 63, Kakao Bank with 53, Sh Suhyup Bank with 50, KB Kookmin Bank with 45, Shinhan Bank with 37 and Woori Bank with 34. Hana Bank and NH NongHyup Bank logged 22 and 20 outages, respectively.

Program errors were the leading cause, accounting for 280 cases, or 50.5 percent of the total. System and equipment failures accounted for 92 cases, external factors for 86, system failures for 66 and human error for 29.

Among program errors, Toss Bank had the most at 39, followed by SC First Bank with 35, KB Kookmin Bank with 34 and Kakao Bank with 30. KB Kookmin Bank stood out in particular: 34 of its 45 total outages were attributed to program errors, a share of 75.6 percent.

A total of 109,769 customers received compensation related to outages during the same period. Kakao Bank accounted for 63.5 percent of that figure with 69,686 customers, followed by KB Kookmin Bank with 18,155, Toss Bank with 10,375, Jeju Bank with 6,776 and Woori Bank with 2,586.

Total compensation reached 153.64 million won ($116,000), averaging about 1,400 won per customer. However, the per-customer payout varied widely across banks due to differences in the type and scale of each outage.

Kakao Bank paid a total of 1.94 million won to 69,686 customers, putting its average payout at about 28 won per person. The bank said most of the small-sum payments stemmed from cases in which the automatic savings feature of its "piggy bank" product — a low-balance savings service — failed to operate properly.

At Shinhan Bank, a program error occurred during the registration of interest rate reductions for borrowers who had faithfully repaid their Sunshine Loan obligations. The error caused 501 cases to go unprocessed, and the bank refunded about 13 million won in interest. Additional compensation for the delayed refunds totaled 89,203 won, averaging about 178 won per customer.

A Shinhan Bank official said some eligible borrowers were omitted due to a program error in the interest rate reduction registration process for diligent Sunshine Loan repayers, and that after identifying the error, the bank paid back the excess interest collected along with compensation for the delay period.

Park said the frequent outages caused by program errors showed that banks' basic system verification and management were lax. "Financial authorities and banks must strengthen pre-emptive inspections of IT systems and measures to prevent recurrence, and must also provide appropriate compensation to affected customers," he said.

Meanwhile, security breaches have also been mounting in the financial investment sector. Personal and credit information of 38,490 customers was leaked at Daishin Securities, and a hacking incident was confirmed at Mirae Asset Global Investments, with financial authorities working to determine the scope of the damage. Virtual asset exchange Bithumb is also investigating a possible personal data leak after unauthorized access was detected in its internal groupware system.