Next-Generation Computer Network After 6 Years... "Survival Strategies for Savings Banks in the AI Era"

Next-Generation Integrated Financial System to Be Introduced as Early as Next Year
"AI Finance Accelerates... Savings Banks Also Keep Pace"

The Korea Federation of Savings Banks is set to overhaul its computer network for the first time in over six years. The next-generation system aims to reduce IT incidents and keep pace with the rapidly changing digital environment.

According to the financial sector on the 8th, the Korea Federation of Savings Banks recently announced a consulting project for the next-generation Integrated Financial Information System (IFIS) and has begun selecting a contractor. They plan to finalize a contract with one consulting firm within this month and introduce the next-generation IFIS as early as next year. The federation plans to invest approximately 1.5 billion KRW in the integrated computer network overhaul project.

IFIS has been the integrated computer network provided by the Korea Federation of Savings Banks since February 2018, handling major IT operations, credit evaluation systems, and external financial transactions. Out of 79 domestic savings banks, 67 use the federation’s computer network. The remaining 12 banks, which have built their own networks, also use the federation’s network when transacting with other financial institutions such as commercial banks.

The reason the Korea Federation of Savings Banks is building the next-generation IFIS is due to the aging of the current system, which has been in use for over six years. According to data submitted by the Financial Supervisory Service to Kim Han-gyu, a member of the Democratic Party, there were a total of 33 IT incidents in the savings bank industry last year. In January last year, OK Savings Bank and Accuon Savings Bank experienced application (app) outages lasting approximately 18 hours and 11 hours respectively, causing inconvenience to financial consumers.

In addition, the Korea Federation of Savings Banks is pushing for the integrated network overhaul to enhance services and respond to each member bank’s needs. With artificial intelligence (AI) beginning to enter the financial sector, there is a need to build a future-oriented platform for savings banks as well. It is expected to provide products and services tailored to customer preferences, such as non-face-to-face digital businesses and partnership services. Furthermore, the next-generation network will enable timely responses to the different needs of member banks based on region and asset size.

A representative of the Korea Federation of Savings Banks said, “Network overhauls typically occur every three years at the earliest, and usually every five to seven years. The IT errors that have occasionally occurred so far are expected to improve after switching to the next-generation system.” They added, “The digital market is changing rapidly, and the computer network used by the savings bank industry needs to keep up accordingly. Transaction volumes at savings banks are expected to continue increasing, and this will also have the effect of expanding the network’s capacity.”