'Cumulative Losses from Fraud and Embezzlement Financial Incidents Exceed 1 Trillion Won Over the Past 5 Years'

Clear Increase in Financial Accidents at Savings Banks Responsible for Serving Ordinary Citizens
Assemblyman Kang Myung-gu: "Repeated Financial Accidents Threaten Financial Market Stability"

It has been revealed that the cumulative losses from financial accidents at financial companies over the past five years have exceeded 1 trillion won.

According to data submitted by the Financial Supervisory Service to Kang Myung-gu, a member of the National Assembly's Political Affairs Committee, the cumulative losses caused by financial accidents at financial institutions over the past five years (2019?2023) reached 1 trillion won. Most of the losses were due to internal embezzlement and fraud crimes.

By type, financial investment companies such as asset management firms and trust companies incurred losses of 712.4 billion won. Banks suffered losses of 233.4 billion won due to internal embezzlement and other causes. Following that, savings banks recorded losses of 52.5 billion won, insurance companies 46.1 billion won, and credit information companies 850 million won.

Financial investment companies recorded losses of 612.4 billion won solely from ‘fraud,’ accounting for 88.8% of the total fraud losses of 688.9 billion won. The rapid increase in transactions of emerging assets such as Bitcoin was identified as a major cause of these fraud incidents. Kang pointed out that the financial authorities failed to effectively respond to changes in the trading environment, which exacerbated the damage.

In particular, financial accidents at savings banks, which are responsible for serving low-income households, showed a clear increasing trend. The losses of savings banks were only 240 million won in 2019 but surged 36 times to 8.71 billion won in 2023.

Kang Myung-gu emphasized, “Repeated financial accidents not only undermine public trust but can also pose a serious threat to the stability of the financial market,” adding, “To prevent financial accidents, internal controls and response systems must be strengthened.”