Shinhan, Woori cut this year's budgets by double digits as lenders review defenses
South Korea's biggest banks are preparing to boost security spending following a wave of data breaches, with Shinhan Bank and Woori Bank reversing course after cutting this year's budgets by double digits.
The attacks exposed customer information through systems used by employees and loan agents, as even banks that had increased their security budgets suffered breaches.
Shinhan earmarked 40.59 billion won ($30.4 million) for information security this year, the least among the five major lenders and down 10.4 percent from a year earlier, according to Financial Supervisory Service data released Friday by Rep. Park Dae-chul of the opposition People Power Party. Woori cut its allocation 21.7 percent to 61.57 billion won.
The other three lenders increased their budgets. KB Kookmin Bank allocated the most at 86.08 billion won, followed by NH NongHyup Bank at 80.13 billion won and Hana Bank at 63.64 billion won. The five banks' combined budgets rose 3.8 percent to about 332 billion won.
Shinhan also ranked last in security spending as a share of its overall information technology budget, at 9.1 percent. Hana led at 12.2 percent, followed by NongHyup at 10.5 percent. KB and Woori each allocated 9.9 percent.
Shinhan suffered the largest disclosed breach, affecting about 25,000 customers, while having the smallest security budget. KB, which allocated the most and increased its budget substantially, also reported a breach, as did Hana. Woori made the deepest cut but said it had blocked recent attacks without additional customer information being leaked.
Industry reports show the lenders are now drawing up fresh investments. KB plans to allocate more than 100 billion won to information security next year, at least 16 percent more than this year. Woori is considering increasing its budget for building security systems by more than 20 percent and expanding specialist staffing by more than 10 percent.
Hana is pursuing security projects worth tens of billions of won, with work scheduled to begin from this quarter through next year. NongHyup plans to increase investment next year in server security, artificial intelligence safety testing and vulnerability management.
A Shinhan official said the lender plans to set its security budget at an industry-leading level after reviewing three years of allocations and spending at its own bank and peers, but did not give a specific figure. The bank also plans to retain external security specialists, expand threat detection systems and build an AI-powered security operations center to identify and contain attacks.
"We plan to recognize security as an investment rather than simply a cost and are reviewing various projects to strengthen our information security framework," Shinhan said.
jwc@heraldcorp.com