As hacking attacks targeting the financial sector continue, cases of customer personal data leaks are being confirmed at secondary lenders such as savings banks and mutual finance groups.

OK Savings Bank said it confirmed a data leak involving 250 loan applicants and found that information on another 268 customers using deposit and other funding services was also leaked. The total number of affected customers is 518. The leaked data included financial transaction information such as account numbers, annual income and loan amounts, as well as deposit balances and interest rates.

At Yegaram Savings Bank, about 50,000 cases of customer personal data were leaked. Items included resident registration numbers and account numbers. The Financial Supervisory Service has begun an on-site inspection to determine the cause and the circumstances of the leak and is reviewing whether to switch to a formal probe.

The National Credit Union Federation of Korea also saw a leak of personal data of customers using its mutual aid insurance. The leaked information was confirmed to include encrypted resident registration numbers, account numbers, contact details and balances.

Financial authorities said that as of the 14th, security breach incidents were confirmed at 16 financial firms, including banks, savings banks and mutual finance groups, and the number of leaked records was estimated at about 100,000.

In an emergency security inspection of 555 financial firms, 130 were found to have shortcomings in security management. Key problems cited included not applying the latest security patches and weaknesses in access controls.

The Financial Services Commission said it would pursue steps to strengthen the security management responsibility of chief executives and boards of directors, using the series of breach incidents as a catalyst. It also plans to expand the vulnerability check cycle for major financial firms to at least twice a year.

It also plans to improve security management systems across the financial sector, including by reviewing the introduction of a shared security monitoring system for small and mid-sized financial firms.

• OK Savings Bank says deposit customer data also leaked after loan customers; 268 more confirmed • OK Savings Bank confirms personal data leak of 250 customers, including account numbers and annual income • Savings bank hacking spreads; OK Savings Bank also probes customer data leak • FSS begins on-site inspection into Yegaram Savings Bank hacking incident, reviews switch to formal investigation • National Credit Union Federation of Korea reports mutual aid insurance personal data leak, including resident registration numbers and account numbers • 100,000 records leaked in financial sector hacking; FSC to strengthen CEO security management responsibility

As data leak incidents continue in the financial sector, banks are moving to expand security investment and strengthen systems to prevent financial fraud. Still, the execution rate for information protection budgets at the four major commercial banks last year was 68.0 percent. Some also point to the need to improve not only investment but the effectiveness of actual spending.

KB Kookmin Bank plans to increase its information protection budget in 2027 to more than 100 billion won. Shinhan Bank is also reviewing setting a budget at what it called the industry’s top level. Hana Bank is pushing ahead with a security system buildout project worth hundreds of billions of won.

The use of artificial intelligence technology to prevent financial fraud is also expanding. KB Kookmin Bank said it prevented about 150 billion won in financial fraud losses by the end of September this year through an AI-based fraud detection system and cooperation with police.

Woori Bank plans to build a next-generation fraud detection system linking generative AI with transaction and login information and to launch a new monitoring system from November.

Cryptocurrency exchange Bithumb also launched a user protection effort by running a campaign to prevent secondary fraud, such as phishing and voice phishing, that exploits leaked personal data.

Abroad, large U.S. financial firms including Citigroup, Bank of America and JPMorgan are also tightening caution over external AI agents. They are restricting external AI agents’ access to accounts, citing customer data protection and concerns about unauthorised transactions and deposit outflows.

• Banks move belatedly to expand security investment; effectiveness of execution is key • KB Kookmin Bank strengthens AI abnormal transaction detection and police cooperation to block financial fraud losses • Woori Bank to build next-generation FDS, activate AI-based financial fraud monitoring • Bithumb runs campaign to prevent secondary fraud exploiting leaked personal data • Major financial firms successively block access by personal AI agents, citing concerns about fund outflows

South Korean stocks underwent a sharp correction as worries about U.S. rate hikes combined with uncertainty over the profitability of AI investment. On the 15th, the KOSPI fell 7.57 percent. Intraday, the combined market value of the KOSPI and KOSDAQ fell by about 389 trillion won. Samsung Electronics and SK Hynix accounted for 228 trillion won of that decline.

In the selloff, trading concentrated in inverse exchange-traded funds that bet on falling share prices. Two flagship products posted 242.32 billion won in combined daily turnover.

The Financial Services Commission held an emergency inspection meeting and urged financial firms to refrain from indiscriminate credit provision and to strengthen risk management. The government also decided to strengthen joint monitoring by relevant agencies and respond strictly to market-disrupting acts.

This week, third-quarter earnings by U.S. big tech firms and their AI investment plans are cited as key variables determining whether the rebound continues. The recovery in Samsung Electronics and SK Hynix shares is also seen as hinging on whether funding conditions improve for U.S. AI data centre companies.

• [Stock outlook] Can markets rebound after a crash? Focus on U.S. big tech earnings • Government to strengthen joint monitoring of stock market volatility, vows strict response to market disruption • Bets on declines grow in selloff as inverse ETF daily turnover tops 200 billion won • FSC conducts emergency inspection after stock plunge, says firms should refrain from indiscriminate credit provision • Market value evaporates by 389 trillion won in stock plunge; Samsung Electronics and SK Hynix alone down 228 trillion won • When will Samsung and SK Hynix rebound after an economy-crisis-level drop? It depends on AI data centre funding conditions

At the parliamentary audit, key issues included weak internal controls at NongHyup, the soundness of mutual finance groups, gaps in financial services among banks and fair competition between platforms.

At the Oct. 16 audit of NongHyup, lawmakers focused on the failure to report 6 suspected crimes such as embezzlement and breach of trust by executives and employees, the investigation status of 14 suspected misconduct cases, and allegations that Kang Ho-dong (강호동), chairman of the National Agricultural Cooperative Federation, purchased high-priced commemorative gifts. Kang denied involvement in the allegations.

Criticism also continued after revelations that the delinquency rate on joint loans at local agricultural cooperatives reached 17.5 percent and that executive performance bonuses were paid even at loss-making cooperatives, raising questions about management of bad loans and accountability.

At the audit of financial public institutions, issues raised included the share of deposits held at Busan Bank among deposits of public institutions relocated to Busan being limited to 14.9 percent and gaps among banks in the time required to execute reverse mortgage loans.

At the Fair Trade Commission audit, allegations were raised of unfair discrimination after Naver linked services with 15 POS companies but excluded Toss Place. The commission said it would look into whether there was preferential treatment for its own business and discrimination against competitors.

At the Bank of Korea audit, issues included the possibility of an additional base rate hike and housing prices and household debt in the Seoul metropolitan area. Questions also continued over personal data protection in 'Project Hangang', a digital currency pilot, and the central bank’s responsibility for its response related to single-stock leveraged ETFs.

• [2026 Audit] NongHyup omitted reporting 6 suspected embezzlement and breach-of-trust cases; Chairman Kang Ho-dong denies corruption allegations • [2026 Audit] NongHyup joint loan delinquency rate at 17.5 percent; executive bonus 'feast' even at loss-making cooperatives • [2026 Audit] Where did NongHyup reform pledges go? Lawmakers also press on probe status of 14 misconduct allegations • [2026 Audit] Gaps in banks’ fund management and reverse mortgage processing raise calls for system improvements • [2026 Audit] Will FTC step in over Naver-Toss POS conflict? Allegations of discrimination raised • [2026 Audit] From rates and home prices to digital currency, BOK audit in the spotlight

Personnel and policy changes involving financial authorities also continued. After the government announced plans to relocate the Financial Services Commission to Sejong in the second half of 2027, the financial union demanded it be withdrawn, citing concerns about weakening cooperation between financial policy and supervisory agencies and financial firms. It also said discussions on relocating financial institutions such as the Korea Development Bank and Industrial Bank of Korea should be halted.

President Lee Jae-myung appointed Shin Jin-chang (신진창), secretary general of the Financial Services Commission, as vice chairman. Shin is a financial policy expert who has served in key posts including director general for financial policy and director general for financial industry.

The Financial Supervisory Service moved to strengthen internal controls by raising rewards for whistleblowing on internal wrongdoing to up to 1 billion won in savings banks, mutual finance groups and specialised credit finance. It also allowed anonymous tips and attorney-submitted reports.

Household lending turned to a decline. In September, household loans across the financial sector fell by 2.2 trillion won from the previous month, marking the first net drop this year. Mortgage lending rose by 3.3 trillion won, and financial authorities decided to maintain their stance on managing household debt.

The September COFIX based on new transactions, a benchmark for bank floating-rate loans, rose 0.25 percentage points from the previous month to 3.43 percent. As banks’ funding costs rise, it is being raised as a possibility that interest burdens for borrowers with floating-rate mortgages could increase.

• Financial union protests FSC relocation to Sejong, says relocation of financial institutions to regions should also be halted • Shin Jin-chang appointed FSC vice chairman after holding key financial policy and industry posts • FSS raises rewards for reporting internal wrongdoing at savings banks and mutual finance to up to 1 billion won • September COFIX rises to 3.43 percent; will floating mortgage burdens increase? • September household loans fall 2.2 trillion won, first net decline this year

In the financial sector, efforts to restructure business models also continued, including strengthening insurance businesses, expanding overseas operations and increasing cooperation between banks.

Shinhan Financial Group signed a contract to acquire a 77.04 percent stake in Lotte Insurance for 693.3 billion won and is pushing to integrate it with Shinhan EZ Insurance. The goal is to strengthen competitiveness in non-life insurance, but challenges remain including total funding input of 1.2 trillion won, the possibility of additional capital increases and normalising performance.

In Indonesia, it shifted to a business holding company structure encompassing local banking, card and securities subsidiaries to improve efficiency in managing overseas operations. IBK is also moving to establish a local unit in Vietnam for the first time in 9 years, stepping up efforts to target the small and medium enterprise finance market.

In South Korea, joint loans by internet-only banks and regional banks are expanding beyond personal credit loans into corporate finance. Following KakaoBank and Busan Bank, Toss Bank and Gwangju Bank are also pushing for joint corporate loans, broadening the scope of inter-bank cooperation.

As banks pursue business expansion alongside management efficiency, customer inconvenience and employee workload stemming from digital transformation have also emerged as issues to address.

• Shinhan Financial completes its 'insurance puzzle', but additional capital increases and earnings recovery remain tasks • Shinhan Financial buys Lotte Insurance for 693.3 billion won, pushes integration with Shinhan EZ Insurance • Shinhan Financial bundles Indonesia banking, card and securities, shifts to business holding company system • IBK to set up Vietnam unit for first time in 9 years, targets local SMEs • Joint lending expands from individuals to corporates as internet-only and regional banks deepen cooperation • Banks’ digital transformation continues, but 'customer wait times and employee burden' remain. Why?

In the digital asset market, controversy continues over the timing of taxation and regulations on exchange ownership stakes. The National Tax Service said it is preparing to announce in November taxation standards by transaction type, including staking, airdrops and DeFi, ahead of digital asset taxation scheduled for next January.

In politics, moves to postpone taxation are spreading. Park Min-gyu (박민규), a lawmaker from the Democratic Party, is pushing a bill that would effectively delay taxation to 2029, considering the timing for launching the Crypto-Asset Reporting Framework system for exchange of digital asset transaction information between countries. Bills to abolish or postpone taxation have also been introduced in the opposition camp.

With phase-two legislation on digital assets delayed, limits on the stakes held by major shareholders of exchanges are also an issue. The Financial Services Commission says ownership regulation is needed to strengthen exchanges’ public nature and accountability, but specific caps and application standards have not been finalised.

The industry worries regulatory uncertainty could weigh on investment and mergers and acquisitions. Attention is on how it may affect a stock swap between Naver Financial and Dunamu, Korea Investment & Securities’ investment in Coinone and Mirae Asset Group’s expansion of exchange-related business.

• National Tax Service says it is preparing to announce digital asset tax standards in November • Ruling party also pushes digital asset tax postponement, with plan emerging for implementation in 2029 • Even as digital asset law is delayed, limits on exchange ownership stakes to be maintained; concerns about reduced financial sector investment

As discussions on institutionalising digital assets continue, financial firms at home and abroad are expanding businesses to preempt stablecoin payments and the asset tokenisation market.

Hecto Financial joined the OpenUSD ecosystem in addition to Circle’s global payments network, expanding its digital asset payment and settlement base. In the securities industry, attention is on the possibility that it could secure demand for stablecoin settlement by using existing foreign exchange licences and global payment networks.

Meritz Securities is working with the Canton Foundation to build tokenised asset and digital asset financial infrastructure. In Japan, three megabanks — Mizuho, Mitsubishi UFJ and Sumitomo Mitsui — completed a cross-border payment pilot using a jointly issued stablecoin and are pushing to introduce it into real transactions.

Global payments company Mastercard is also moving to expand payment networks using AI and stablecoins to improve speed and cost efficiency in cross-border remittances.

Central banks are also discussing digital currencies. European Central Bank President Christine Lagarde reaffirmed preparations to introduce a digital euro for everyday payments that does not replace cash, stressing the need to innovate the payments market and promote competition.

• "Hecto Financial expands global payment networks, expected to preempt stablecoin settlement" • Meritz Securities cooperates with Canton Foundation on tokenisation and digital asset infrastructure • Japan’s three megabanks complete cross-border payment pilot using jointly issued stablecoin • Mastercard expands network by combining AI and stablecoins for cross-border remittances • ECB President Lagarde says euro zone economy is solid and digital euro is nearing

In overseas financial markets, financial companies continued to improve earnings and expand new businesses even as concerns persisted over an AI investment bubble and inflation pressures.

As AI tech shares weakened and funds flowed into U.S. Treasuries, the September consumer price inflation rate came in at 3.7 percent. Major banks such as JPMorgan and Citigroup posted strong third-quarter results, but rising deposit funding costs from rate increases were cited as a burden.

In the U.S. banking sector, the spread of real-time payments has emerged as a challenge, increasing the burden of account verification. Establishing standards to clarify liability when AI-related financial incidents occur has also come to the fore.

In fintech, U.S. firm Ramp raised $1.85 billion in investment, valuing it at $60 billion. Visa obtained preliminary approval from the People’s Bank of China and began procedures to enter the local card clearing market.

In Japan, SBI Holdings is pushing to set up a joint venture with Yoshimoto Kogyo and is moving to expand content investment using digital securities and funds.

• Concerns about AI bubble drive money into U.S. Treasuries • U.S. inflation jumps 3.7 percent, but Wall Street banks post run of strong results • U.S. banks’ third-quarter results nearing as higher rates flash warning sign on deposit costs • U.S. financial sector faces 'account verification' burden, with lack of unified rules the issue • Who is responsible for AI mistakes? U.S. banking sector moves to set standards for financial incidents • B2B fintech Ramp raises $1.85 billion, valued at $60 billion • Visa knocks on China market door after gaining 'preliminary approval' from central bank • Finance technology added to Japanese content as SBI and Yoshimoto push for joint venture

Other major moves in the finance and fintech industry were also summarised.

KB Kookmin Bank launched a principal-protected equity-linked deposit with an annual rate as low as 3.10 percent and a B2B payments-funds-only account offering an annual rate of up to 2.2 percent. Shinhan Bank further cut loan rates for mid-to-low credit borrowers by 0.3 percentage points and introduced a time deposit offering up to 4 percent annually for customers making their first salary transfer. KB Securities is pushing external commercialisation of its in-house 'Kkaebi AI' and a token securities business targeting high-net-worth individuals in the United States. Hana Financial Group held on-site interviews involving 20 companies to support re-employment for middle-aged residents in Incheon. Hana Bank issued $600 million of dollar-denominated bonds, securing $2.7 billion in investor demand. Sh Suhyup Bank is offering preferential benefits based on merchant settlement deposit performance to attract self-employed customers as primary banking clients.

• KB Kookmin Bank sells principal-protected equity-linked deposits, guarantees annual rate as low as 3.10 percent • KB Kookmin Bank offers parking account for B2B payment funds, annual rate up to 2.2 percent • Shinhan Bank further cuts loan rates for mid-to-low credit borrowers by 0.3 percentage points, keeps annual cap at 6.9 percent • Shinhan Bank offers time deposit up to 4 percent annually for first salary-transfer customers • KB Securities says it will commercialise 'Kkaebi AI' and target U.S. high-net-worth individuals with token securities • Hana Financial supports re-employment for middle-aged people in Incheon with on-site interviews from 20 companies • Hana Bank issues $600 million in dollar bonds, secures $2.7 billion in investor demand • Sh Suhyup Bank moves to attract self-employed customers, offers benefits by merchant settlement performance

KakaoBank launched a product in which AI helps customers save and offers an annual interest rate of up to 5 percent if they achieve their goals. It also expanded financial services for foreign residents in South Korea, from account opening to overseas remittances. K Bank is recruiting interns for employment-linked programmes and will assign AI practical tasks to all applicants.

Toss Bank donated 46 work laptops to digital education sites. Jeonbuk Bank added price information from South Korea’s five major virtual asset exchanges to its mobile banking app, Ssok Bank, to improve access to digital asset information.

• KakaoBank offers AI coaching for savings, annual rate up to 5 percent upon achieving goals • KakaoBank expands services for foreign residents in South Korea, from account opening to overseas remittances • K Bank recruits interns for employment-linked programme, assigns AI practical tasks to all applicants • Toss Bank reuses 46 work laptops, donates them to digital education sites • Jeonbuk Bank adds price information from five major exchanges to 'Ssok Bank'

Naver Pay, Kakao Pay and Toss decided to notify 1.76 million holders of prepaid balances that have not been used for a long period.

Naver Pay will support a special guarantee worth 7.5 billion won for small business owners in Jeju and, together with Naver, will also expand support for small merchants by linking payments, data and financial services. Kakao Pay introduced a service that allows users to accrue missed point benefits after the fact regardless of the payment method used.

• Naver, Kakao and Toss to notify 1.76 million people of unused prepaid balances, with differing notification standards • Naver Pay to provide 7.5 billion won special guarantee for small merchants in Jeju, support digital payments • Naver and Npay to expand support for small merchants by linking payments, data and finance • Kakao Pay to help users recover missed points, allowing post accrual regardless of payment method

BankSalad developed technology to control errors that can occur in AI financial transactions and filed 3 patent applications. An analysis also found that using MyData could help detect early delinquency risk among borrowers facing sustained funding pressure.

Webcash will work with WiseR to provide accounting and cash management services for Chinese companies in South Korea.

The online investment-linked finance industry is urging the establishment of fair competition standards related to large corporations’ market entry and the protection of the innovation base of startups.

• BankSalad develops technology to control AI financial transaction errors, files 3 patents • "If funding pressure continues for 3 months, delinquency rate 2.6 times higher; MyData can detect early" • Webcash ties up with WiseR to support accounting and cash management for Chinese companies • Online investment-linked finance industry says fair standards needed for big-company entry, startups’ innovation base must be protected