“Are they qualified for reappointment?” Five major bank chiefs apologize at National Assembly over hacking fallout (Updated)

[Financial News] The chiefs of the five major banks publicly apologized for harm to customers as they appeared before the National Assembly’s Political Affairs Committee for a parliamentary audit of the Financial Supervisory Service in connection with recent hacking incidents.
On the 19th, KB Kookmin Bank President Lee Hwan-ju, Shinhan Bank President Jeong Sang-hyeok, Hana Bank President Lee Ho-seong, Woori Bank President Jeong Jin-wan, and NH Nonghyup Bank President Kang Tae-young appeared as witnesses at the parliamentary audit and pledged to increase security budgets and compensate victims.
President Jeong Sang-hyeok replied, “I feel deeply sorry,” after People Power Party lawmaker Kim Jae-seop pointed to a large-scale leak of customer information caused by the hacking incident. When Democratic Party lawmaker Jeon Hyun-hee criticized the shortage of security funding, Jeong pledged, “We will invest in information security at a level the public can find acceptable.” President Lee Hwan-ju also said, “I sincerely apologize that this incident occurred at a financial institution that should be built on trust,” and added, “We will secure sufficient funding and personnel to respond to AI-powered hacking.” He went on to note the difficulty of responding, saying, “We face around 50,000 hacking attacks every day.”
When Democratic Party lawmaker Kim Yong-man pointed out that KB Kookmin Bank was the hackers’ first target, Lee acknowledged that the bank had not responded quickly enough. He also denied a tip that an information security executive had ordered the deletion of logs and a cover-up on September 30, saying, “I never gave such an order, and I was not briefed on it.”
Hana Bank President Lee Ho-seong also apologized to customers and the public and stressed efforts to prevent a recurrence by building AI systems and adding staff. “We have already taken measures such as waiving fees, and we will prevent secondary harm through financial safety insurance and other means,” he said, adding, “If any harm occurs, we will make full compensation.”
Woori Bank and NH Nonghyup Bank, which were targeted by hacking attacks but suffered no information leaks, nonetheless pledged to strengthen their security systems. Woori Bank President Jeong Jin-wan explained, “We were lucky not to suffer damage from hacking,” adding, “We receive at least 200 hacking attacks a day.” NH Nonghyup Bank President Kang Tae-young said, “We will strengthen oversight by upgrading the next-generation integrated monitoring system built in 2022.”
Calls for governance reforms also continued, as the terms of the five major bank chiefs are set to expire at year-end. Referring to the Financial Supervisory Service’s special inspection report on governance, Democratic Party lawmaker Park Hong-bae criticized “reappointing themselves, self-awarded compensation, inner circles, entrenchment, and a league of their own.”
When Democratic Party lawmaker Lee Kang-il asked, “Does anyone think performance is the most important factor in a bank chief’s reappointment?”, only President Jeong Sang-hyeok raised his hand. In response to the question, “Is it internal management?”, Hana Bank President Lee Ho-seong and Woori Bank President Jeong Jin-wan raised their hands. Lee stressed that bank chief appointments should be decided by the board after a comprehensive assessment of candidates’ abilities, including their performance and internal controls. When Social Democratic Party lawmaker Han Chang-min pressed Jeong Sang-hyeok, saying, “A bank chief who couldn’t even protect customer information has no right to discuss reappointment,” Jeong said, “I haven’t considered that issue at this point,” and stated that he was currently focused on remedies for victims and measures to prevent a recurrence.
Meanwhile, concerns were also raised that since the amended Banking Act took effect in July this year, some banks had lowered add-on rates while cutting preferential rates by a larger margin. According to Financial Services Commission data cited by Democratic Party lawmaker Min Byeong-deok, Kookmin Bank lowered its add-on rate from 3.42 percentage points in June to 3.34 percentage points in August, while cutting its preferential rate from 1.96 percentage points to 1.65 percentage points. Over the same period, Nonghyup Bank lowered its add-on rate from 3.60 percentage points to 3.34 percentage points and its preferential rate from 2.19 percentage points to 1.58 percentage points. Min criticized the move, saying, “By cutting preferential rates as a trick while lowering add-on rates, banks have actually increased the share they take.” Rep. Yoo Dong-soo, chair of the Political Affairs Committee, also rebuked them, asking, “Are you saying you’re going to suck the lifeblood out of the public?” Presidents Lee Hwan-ju and Kang Tae-young replied that they “fully understand the concerns over add-on rates” and would submit detailed data.

[email protected] Park Mun-su Reporter