Ten Major Securities Firms Paid Nearly 7 Billion Won in Compensation for IT Incidents Over Three Years: "Infrastructure Investment Needed"

[Financial News] IT incidents at major domestic securities firms are estimated to have affected about 20,000 customers over the past three years. The total damage exceeded 7.3 billion won, while compensation payments came close to 7 billion won.
According to data submitted by the Financial Supervisory Service to Park Jun-tae, a People Power Party lawmaker and member of the National Assembly’s Political Affairs Committee, 113 IT incidents occurred at 10 comprehensive financial investment business operators with equity capital of at least 3 trillion won from 2024 through August this year.
The submitted data showed that a total of 113 IT incidents occurred at 10 comprehensive financial investment business operators with equity capital of at least 3 trillion won from 2024 through August this year. The incidents affected 19,055 customers, with total losses estimated at 7,329,230,000 won. Actual compensation payments amounted to 6,989,410,000 won.
KIWOOM Securities had the largest compensation bill among the companies. It experienced 13 IT incidents over the three-year period and paid customers a total of 3,802,160,000 won. That amount accounted for more than half of the total compensation paid by the 10 major comprehensive financial investment business operators. Korea Investment & Securities followed with 1,204,520,000 won, ahead of Samsung Securities with 839,870,000 won and Meritz Securities with 593,770,000 won.
Korea Investment & Securities paid the most in compensation this year. It paid 1,182,080,000 won for four incidents, accounting for 64.3% of the total compensation paid by major comprehensive financial investment business operators this year, or 1,838,430,000 won. Amid a surge in trading volume last March, when stock market volatility was high, some of the company’s customers experienced an outage that prevented them from checking their account balances on its mobile trading system (MTS). 
More than half of the IT incidents were attributed to program errors. Of the 113 incidents, 58, or 51.3%, were caused by program errors, followed by disruptions caused by external factors at 31.9%, system failures at 15.9%, and human-related disasters at 0.9%.
Critics say securities firms have been lax in investor-protection measures, including system stabilization and advance checks of their information technology (IT) infrastructure, compared with their efforts to generate profits. Earlier, as IT incidents became frequent, financial authorities summoned securities firms’ IT executives last March and ordered them to review their incident-response systems.
Park said, "IT incidents at securities firms are an issue that undermines the stability and reliability of the capital market, going beyond simple system errors. Financial authorities and the industry must devise effective alternatives that encourage preventive measures and investment in IT infrastructure."


[email protected] Park Kyung-ho Reporter