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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] The Financial Services Commission (FSC) is moving forward with the creation of a Digital Finance Security Law (Financial Security Law), which will impose penalties of up to 200 billion KRW and a business suspension of up to 6 months for violations. This initiative aims to strengthen oversight over financial companies' digital and information technology (IT) sectors as digital finance continues to expand.
On Thursday, Kim So-young, Vice Chairman of the FSC, stated during the seminar on "Future Changes and Financial Growth Strategies" that the Commission would "review and concretize the Digital Finance Security Law this year."
The new law proposes a maximum penalty equivalent to 3% of a financial company's total revenue for violations of financial security. However, there is a cap of 200 billion KRW on the penalty amount.
The law also includes additional grounds for imposing penalties, such as incidents caused by a failure to implement proper self-security measures, violations in notifying or sharing information about hacking or security breaches, and cases where these failures result in risks being transferred to other financial institutions or cause significant damage to consumers. In comparison, the current Electronic Financial Transactions Act (EFTA) only imposes penalties for the disclosure of transaction information, with a maximum fine of 50 billion KRW.
Under the current EFTA, failure to ensure security can result in a fine of up to 50 million KRW. However, the new Financial Security Law will offer more detailed grounds for violations, such as "failure to conduct emergency response training," and the regulations will be upgraded to law.
Furthermore, financial companies found to be at fault will face business suspension of up to 6 months in the related field. For instance, if security violations occur in internet banking, the company could face a suspension of new account sign-ups for its internet banking services.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
