Financial Supervisory Service Issues 'Institutional Warning' to Kookmin Bank for Improper Use of Customer Personal Credit Information

[Asia Economy Reporter Bu Aeri] The Financial Supervisory Service (FSS) issued a disciplinary warning to KB Kookmin Bank for improperly using customers' personal credit information to send advertising messages.

According to the FSS disclosure on the 25th, during an inspection of Kookmin Bank, the bank was found to have improperly used customers' personal credit information, failed to delete one-time personal credit information, violated the obligation to verify real names in financial transactions, engaged in incomplete sales of funds and trusts, and violated recording obligations. As a result, the bank received a disciplinary warning, a fine of 1.6164 billion KRW, and 65 employees were given warnings and other measures.

It was investigated that some departments of Kookmin Bank used personal credit information received from other banks for providing open banking services to send profit-oriented advertising messages via mobile text messages without obtaining prior consent from customers.

Additionally, it was revealed that the bank failed to delete personal credit information that had passed three months while managing personal credit information collected for one-time services such as purchasing national housing bonds.

At one branch of Kookmin Bank, during the process of opening an Individual Retirement Pension (IRP) account, even though the account holder had died before the account was opened, an employee prepared new application documents as if the deceased had applied and attached a copy of the real-name verification certificate, thereby opening the account on behalf of the deceased. This was also detected.

The FSS pointed out that Kookmin Bank delayed reporting to the FSS after establishing or closing overseas local subsidiaries, and that the WM (Wealth Management) customer group representative held concurrent positions at both the bank and securities firms without prior approval from the Financial Services Commission.

The FSS also ordered Kookmin Bank to strengthen management and post-reporting of country-specific exposures, enhance management due to inadequate calculation of internal capital limits for credit risk, reinforce internal controls related to corporate deposit interest rate-linked deposit collateral loans, and strengthen review related to overseas subsidiary investments and acquisitions.

KB Financial Group was fined 3 million KRW after the FSS inspection found that employees of its non-life insurance company concurrently held positions at its life insurance company without prior approval from the Financial Services Commission.