[Financial Microscope] IT Incidents Surge as Inspectors Pack Up... Concerns Grow Over Supervisory Gaps at FSS

Five Leave for Every Ten Hired: Outflow Equals Hiring Scale, Raising Red Flags for Inspection Capacity
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Inspections

While a 'phobia of electronic financial incidents' is spreading throughout the financial sector, the supervisory authorities responsible for monitoring and preventing such incidents are now facing a crisis due to an outflow of personnel. As incidents caused by external intrusions are rapidly increasing, surpassing issues of internal control within financial companies, collaboration with government and related agencies is expanding and inspection periods are lengthening. However, the number of internal experts available to carry out this work continues to decline.

Hiring 10 a Year, Losing 5

According to the financial sector on January 28, the Financial Supervisory Service (FSS) saw five resignations from its Digital IT (Information Technology) department last year. This figure is equivalent to the annual number of new Grade 5 IT hires at the FSS. The FSS's recently published data shows that the number of new Grade 5 IT staff hired over the past three years has declined: 13 in 2024, 11 last year, and 7 this year. The proportion of IT staff among all Grade 5 new hires has stagnated at 10.8%, 15.7%, and 10.6% over the same period. Experienced hires were also limited, with no more than 7 in 2023 and no more than 4 in 2025, while this year, only accountants and lawyers were recruited. Internally, some at the FSS note that securing experienced IT staff over the past three years has prevented the immediate departure of five employees from being fatal, but there are concerns that continued outflow will seriously undermine supervisory capacity.

This 'drought' of new IT staff is at odds with FSS Governor Lee Chanjin's direction for departmental leadership appointments this year. In a press release issued on December 22, the FSS stated, "We have retained department heads in units where urgent response to issues such as IT information leaks, virtual asset hacking, and stock price manipulation is required." A total of 22 department heads were retained, accounting for one-fourth of all department heads (82 in total). Notable examples include the heads of the IT Inspection Bureau and Electronic Financial Inspection Bureau, which handled recent high-profile inspections of Coupang and Lotte Card, as well as the Electronic Financial Supervision Bureau, which designs relevant systems. The fact that department heads are being retained underscores the urgent need for IT response personnel, yet the agency is struggling to secure enough staff at the working level.

'Public' Re-designation Risk..."Personnel Outflow Burden Increasing"

Within the FSS, there is a growing consensus that, for now, the focus should be on retaining existing IT talent rather than recruiting new ones. Many employees acknowledge the reality that it is difficult to secure high-quality supervisory and inspection personnel under current external conditions. The biggest variable is whether the FSS will be re-designated as a public institution by the government and the political sector. If designated as a public institution, the FSS would face annual management evaluations by the Ministry of Economy and Finance’s Public Institutions Management Committee and be subject to strict controls over its budget and personnel expenses. Ultimately, there are significant concerns that if the FSS is effectively converted into a 'Financial Supervisory Corporation,' it will become even more difficult to maintain independent oversight of financial companies.

In this context, FSS Governor Lee Chanjin has strongly opposed the move, describing it as a "superstructure upon a superstructure," arguing that having both the Financial Services Commission and now the Ministry of Economy and Finance as superior agencies is unreasonable. If the FSS becomes a public institution, the pressure from audits by the Board of Audit and Inspection regarding internal misconduct or institutional operations will inevitably intensify. One FSS official said, "With it being difficult to avoid re-designation by the Public Institutions Management Committee, there is no clear way to prevent internal staff departures," adding, "When young employees notify us that they are moving to law firms, there is little we can say except 'thank you for your hard work.'"

Declining Inspection Efficiency..."Hard to Stop Departing Juniors"

Some within the FSS express frustration that, under the Lee Jaemyung administration, the demand for policies on livelihood finance and consumer protection has surged, but there are no measures to increase staff, leading to a significant decline in morale. Tasks requiring collaboration with other ministries, such as voice phishing (Ministry of the Interior and Safety) and big tech incidents (Ministry of Science and ICT, Personal Information Protection Commission), are increasing and inspections are becoming more complex, but the lack of personnel support is lowering work efficiency.

In fact, the FSS extended both on-site monitoring and inspections once each in relation to the customer information leak at Coupang's subsidiary, Coupang Pay. The Lotte Card inspection was conducted more than three times, and it is expected that several more months will be needed before the Sanctions Review Committee’s decision and the Financial Services Commission’s deliberation and resolution. In addition, sanction procedures for information leak incidents at other major card companies, such as Woori Card and Shinhan Card, are also pending, all of which fall under the jurisdiction of the IT inspection departments.

Another FSS official commented, "IT incidents are becoming more sophisticated and intelligent, so the importance of deploying specialized personnel is growing, but it is difficult to prevent outflow. Unless there is a fundamental improvement in working conditions, not only will it become harder to retain existing staff, but it will also be increasingly difficult to attract new talent."