Financial companies in South Korea will step up their identification process for online users in a broad move to prevent cyber fraud, which is becoming a rampant problem here, the financial regulator said Monday.
All financial companies, including banks, insurers, brokerage firms and savings banks, must have their online users identify themselves through either a text message or an automated response system, starting from Sept. 26, according to the Financial Supervisory Service (FSS).
An online banking user will receive an authentication number from the financial company he/she wishes to log in to, and that number must be typed in correctly for the user to get online access to the desired account, the FSS said.
Until now, most financial companies here other than major banks had let users easily access their websites for online transactions via an online authentication certificate, which is accessible with a single password.
Every financial firm must ask an online user to go through the same verification process if the requested withdrawal amount exceeds 3 million won ($2,757) per day, the regulator said.
The toughened measures came on the heels of cyber fraud such as voice phishing having become increasingly prevalent here. A malicious code designed by hackers is automatically downloaded onto a user's personal computer from the bank's website and steals account details from the user to withdraw money.
Major banks, including KB Kookmin Bank and Shinhan Bank, have started to amend their terms in their online banking contracts to be able to update their online security, with other secondary financial companies like insurers to soon follow suit, according to the regulators. (Yonhap News)