[2024 National Audit] Financial Scandals Total 661.7 Billion KRW Over 7 Years... 60% Involve Banks

Start of Financial Sector Audit by the National Assembly's Political Affairs Committee on the 10th

It has been revealed that the scale of financial accidents such as embezzlement and breach of trust occurring across the entire domestic financial sector is at the level of 100 billion KRW annually. About 6 out of 10 cases occurred in banks.

According to data on the 'Status of Financial Accidents in the Domestic Financial Sector' received by Kang Min-guk, a member of the National Assembly's Political Affairs Committee from the Financial Supervisory Service on the 10th, a total of 463 financial accidents occurred from 2018 to August of this year. The scale amounted to 661.673 billion KRW.

Kang Min-guk, member of the People Power Party.

By year, the amounts were 93.6 billion KRW (89 cases) in 2018, 42.439 billion KRW (60 cases) in 2019, 28.153 billion KRW (74 cases) in 2020, 72.832 billion KRW (60 cases) in 2021, 148.815 billion KRW (60 cases) in 2022, and 142.216 billion KRW (62 cases) in 2023. For this year, the amount of financial accidents that occurred up to August alone was 133.652 billion KRW (58 cases). This is close to an annual average level of 100 billion KRW.

By type of financial accident, breach of trust in the course of duty was the highest at 217.189 billion KRW (56 cases). This was followed by fraud at 202.27 billion KRW (152 cases), embezzlement and misappropriation at 196.206 billion KRW (216 cases), and theft and misappropriation at 844 million KRW (14 cases).

By financial sector, banking financial accidents were the largest at 409.75 billion KRW (264 cases), accounting for 62% of the total amount and 57% of the number of cases. Next were securities at 111.333 billion KRW (47 cases), savings banks at 64.763 billion KRW (47 cases), non-life insurance at 45.815 billion KRW (49 cases), card companies at 22.965 billion KRW (16 cases), and life insurance at 7.092 billion KRW (40 cases).

Among banks, Woori Bank had an overwhelmingly large scale of financial accidents at 142.113 billion KRW (34.7%, 30 cases). Next were Kookmin Bank (68.32 billion KRW, 36 cases) and Kyongnam Bank (60.158 billion KRW, 6 cases). By type, embezzlement and misappropriation were the most common at 166.576 billion KRW (40.7%, 144 cases).

Among savings banks, Yegaram had the largest scale at 8.777 billion KRW (3 cases). KB (7.783 billion KRW, 1 case) and Pureun Mutual (6.953 billion KRW, 3 cases) followed.

[Source: Office of Assemblyman Kang Min-guk]

In the non-life insurance sector, Hana Non-Life Insurance accounted for 55.8% of the total financial accidents with 25.575 billion KRW (5 cases). Seoul Guarantee Insurance (11.433 billion KRW, 3 cases) and MG Non-Life Insurance (2.493 billion KRW, 2 cases) followed.

Among life insurance companies, Samsung Life, Mirae Asset Life, and Heungkuk Life were in order. Among financial accidents, fraud was the most common at 4.057 billion KRW (57.2%, 9 cases).

In the securities sector, Samsung, Hi Investment, and Shinhan Investment were in order, and among card companies, Lotte Card, Woori Card, and Shinhan Card had the largest scales.

Assemblyman Kang Min-guk pointed out, "The astronomical level of financial accidents across the financial sector is due to employees' weak compliance awareness and malfunctioning internal controls." He added, "This not only lowers trust in the financial sector but also causes unnecessary market instability when the frequency and damage scale increase, leading to problems such as risk transfer to sound institutions and the real economy." He further stated, "Financial authorities should significantly strengthen the punishment level not only for the perpetrators of financial accidents but also for related parties," and added, "Customized countermeasures should be established through analysis of financial accidents occurring in each financial sector."