Bill Proposed to Strengthen Electronic Financial Transaction Security... Industry Also Welcomes "Significant Risk Reduction"

Proposed by Democratic Party Lawmaker Kim Han-jung
Includes Support Measures as Well

Kim Han-jung, Democratic Party of Korea / Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kiho Sung] Kim Han-jung, a member of the Democratic Party of Korea, has proposed a partial amendment to the Electronic Financial Transactions Act to strengthen the security of electronic financial transactions. This bill sets security standards for electronic financial transactions and includes grounds for financial authorities to support security enhancements. The related industry also welcomes this bill, drawing attention to the upcoming discussions in the National Assembly.

According to political circles on the 30th, Representative Kim recently introduced the partial amendment to the Electronic Financial Transactions Act containing these provisions.

The core of this bill is that when financial companies develop new electronic financial transaction methods or intend to change the electronic financial transaction methods they use, they must comply with the matters prescribed and announced by the Financial Services Commission as necessary for electronic financial development security. In other words, it establishes a kind of security standard for electronic financial transactions.

Along with this, the Financial Services Commission is explicitly authorized to engage in projects such as ▲research on electronic financial development security technologies and fostering human resources to build a foundation ▲support for activating electronic financial development security for financial companies, etc. ▲and other projects prescribed by Presidential Decree for the advancement of the electronic financial development security field.

A representative from Kim’s office explained, "The purpose is to establish a high-level electronic financial transaction security system regardless of the size of the financial company," adding, "However, since it may be perceived as a new regulation, the bill also includes provisions for the financial authorities to actively support reaching the related standards."

The related industry is welcoming the bill’s proposal. In particular, they expect to establish a system above a certain level while significantly reducing the costs for strengthening security. According to data submitted by the Financial Supervisory Service to Democratic Party member Min Hyung-bae, as of the end of July this year, the ratio of security investment to sales for four platforms?Kakao Pay, Naver Financial, Toss, and NHN Payco?was 2.41%, which is 8.6 times higher than the bank average of 0.84%.

A fintech industry official said, "As non-face-to-face finance becomes commonplace, the data that companies must protect and manage is growing vast, and the importance and necessity of security are also increasing," adding, "Since financial institutions and electronic financial operators must enhance their responsibility and expertise in security, support for security personnel and infrastructure investment should be expanded from a long-term and sustainable perspective."

Another official stated, "The provisions on 'electronic financial development security' included in this amendment to the Electronic Financial Transactions Act are viewed positively in terms of strengthening electronic financial transaction security," adding, "We hope that the delegated matters for notification will be reasonably established without overlapping with existing electronic financial security regulations." He continued, "Since this amendment strengthens the obligation to comply with security at the 'development' stage and reduces security risks, it is necessary to discuss rationalizing network separation regulations at the development stage together."

This content was produced with the assistance of AI translation services.