[EDITORIALS]Trust in electronic bankingMore than 120 million won ($103,000) has been illegally withdrawn from a Kookmin Bank account through telephone banking, adding to bank customers’ concerns about the security of their deposits. After the recent cases of illegal cash withdrawals with forged cash cards, security systems at local financial institutions are being shown to be riddled with loopholes. It seems that customers’ trust in banks is plummeting.
The police are investigating the Kookmin Bank case, and it is still unclear whether the bank is responsible for security breach. The owner of the account might have exposed his password to other people by mistake. But considering that the stolen money has been laundered by a foreign-exchange broker, experts suspect that a crime organization, including expert wiretappers, committed the theft.
Unlike cash cards, with which one can withdraw money with the right password, phone banking is supposedly protected by three or four layers of security, requiring a password and a security card. So a breach of those measures means that the lack of security awareness by customers and by banks has reached an alarming level. The latest incident has revealed loopholes in Kookmin Bank’s security system. Although the country’s largest commercial bank adopted security cards to beef up its security, it has allowed existing customers to make banking transactions over the phone without the cards.
More than 23 million people are using phone banking, compared with 1.7 million Internet banking subscribers. Middle-aged and older people are the common users of phone banking.
If people begin to believe that the only safe way to do business with a bank is to do it through tellers, there will be chaos in the banking system. The convenience of electronic banking will be overturned.
Financial criminals are getting smarter. The most urgent thing is to catch the criminals, but financial institutions must check their security systems to make customers feel secure. Regulators should also examine the electronic banking security at financial institutions and ensure that these problems do not continue.