[Exclusive] Woori Bank Commits to Preventing Embezzlement Recurrence with Inventory Checks Every Two Days...

Sudden and Regular On-Site Audits Greatly Strengthened
First Cross-Inspection Also Conducted
Image Renewal Initiated Under Im Jong-ryong Administration

Woori Bank, which suffered from a '70 billion won embezzlement scandal' last year, has taken strict measures to manage cash on hand. The bank has implemented cross-checks between branches for the first time and strengthened existing surprise and regular cash inspections. Since the appointment of Chairman Lim Jong-ryong of Woori Financial Group, the bank appears to be making every effort to prevent recurrence of embezzlement and to restore its damaged corporate image.

According to a comprehensive report by Asia Economy on the 31st, Woori Bank conducted its second designated audit of the year on the 18th. The bank conducts headquarters audits on individual branches every quarter, during which branch managers must randomly verify the consistency of cash on hand and the proper management of personal information consent forms at their branches. For sub-branches or corporate sales support teams, the heads of those units are responsible for conducting the audits. The results of designated audits must be registered in the internal system on the same day, and failure to register or conduct the audit results in a deduction of the branch’s performance evaluation score (KPI), which is a key indicator for bank branch assessments. In cases of cash discrepancies, a phone report must be made to the bank headquarters followed by sending the original documents.

What made this year’s second designated audit different from previous years was the implementation of cross-audits between branches. Some branch managers were sent to other branches to conduct cash audits, marking the first time Woori Bank has adopted a cross-branch audit approach in designated audits. This seems to reflect consideration that branch managers themselves could be involved in embezzlement incidents. Branch managers instructed to perform cross-audits reportedly arrived at the other branches before the start of business hours on the audit day to directly check the status of safes and cash boxes.

Daily cash inspections at the branch level have also been significantly strengthened. Each branch’s cash manager (deputy branch manager) is required to verify the cash held by affiliated employees daily, and the headquarters even reviews branch CCTV footage to confirm this. The aim is to strictly manage whether the principle of ‘one cash inspection per day’ is properly observed in the field. Previous embezzlement cases in the banking sector often stemmed from negligence in cash management. With the strengthening of surprise and regular cash inspections, some branches reportedly underwent audits as many as four times within two weeks, according to sources on site.

Woori Bank’s move to strengthen cash management is interpreted as a determination to fundamentally prevent recurrence of embezzlement incidents. The bank’s image was tarnished last year due to a 70 billion won employee embezzlement and illegal foreign currency remittances amounting to 9 trillion won. Shortly after his appointment, Chairman Lim convened compliance officers from each group company to establish a ‘Group Internal Control Field Advisory Group’ and announced plans to develop an ‘Inspection Function Innovation Plan,’ signaling a major reinforcement of internal controls. The appointment of Cho Byung-kyu, the new Woori Bank president with a background in compliance, is also seen as related to this effort. A Woori Financial Group official explained, “While this is part of the regular audits officially conducted before, it is the first time cross-audits have been implemented to strengthen internal controls.”