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Woori continues to see its reputation tarnished

By Kim Bo-eun

Woori Bank's headquarters in central Seoul / Korea Times file
Woori Bank's headquarters in central Seoul / Korea Times file
A massive scandal involving banks' mis-selling of financial derivative products dealt a blow to Woori Bank last year, and the lender continues to see its reputation tarnished over continued misconduct.

The Financial Services Commission (FSC) recently finalized an 800 million won fine for Woori, with regards to a system error that occurred in May 2018.

The country's top financial authority imposed a 500 million won penalty on Woori for the system error that caused delays in mobile banking transactions and disabled money transfer to other lenders. Woori said the error was caused in the early stages of a newly introduced system.

The FSC imposed another 300 million fine for failing to prevent a second set of disruptions caused by another system error that occurred in September the same year.

The penalty comes as Woori faces a sanction for a different case in which its employee mishandled customer data.

Woori Bank officials at 200 branches nationwide were found to have changed the personal identification number of customer accounts from January through August 2018, in an attempt to make it appear as if customers who had not made transactions with the bank for a certain period of time had begun new transactions.

Customers that have not made transactions for a certain period of time need to reset their PIN number when they wish to resume transactions. This is why the bank counted new transactions based on changes in PIN numbers.

The case surfaced in February this year after a media report. The Financial Supervisory Service's sanction review committee is set to review punitive measures for Woori over the case, July 16.

Woori was marred by the mis-selling of financial derivative products referred to as derivative-linked funds (DLF) last year. The bank mis-sold the largest amount of funds managed by the troubled Lime Asset Management.

The FSC imposed a 19.7 billion won fine on Woori over the DLF case, but Woori filed an objection against the penalty in May.

Woori is also engaged in a suit against a separate sanction against its group chairman Son Tae-seung for his responsibility over the DLF case as the former Woori Bank CEO.

The sanction imposed in January bars Son from serving a second term, but Woori is seeking to cancel this.

Regarding the latest penalty, a Woori Bank official said, "The system errors occurred right after we set up a new system, at times such as the Chuseok holidays when transactions spiked. Now the system is stable and we have not seen any problems since."

"We have also changed the assessment system of employees so that they do not face a burden of short-term sales achievements," he said, regarding the PIN case.


By Kim Bo-eun

Woori Bank's headquarters in central Seoul / Korea Times file
Woori Bank's headquarters in central Seoul / Korea Times file
A massive scandal involving banks' mis-selling of financial derivative products dealt a blow to Woori Bank last year, and the lender continues to see its reputation tarnished over continued misconduct.

The Financial Services Commission (FSC) recently finalized an 800 million won fine for Woori, with regards to a system error that occurred in May 2018.

The country's top financial authority imposed a 500 million won penalty on Woori for the system error that caused delays in mobile banking transactions and disabled money transfer to other lenders. Woori said the error was caused in the early stages of a newly introduced system.

The FSC imposed another 300 million fine for failing to prevent a second set of disruptions caused by another system error that occurred in September the same year.

The penalty comes as Woori faces a sanction for a different case in which its employee mishandled customer data.

Woori Bank officials at 200 branches nationwide were found to have changed the personal identification number of customer accounts from January through August 2018, in an attempt to make it appear as if customers who had not made transactions with the bank for a certain period of time had begun new transactions.

Customers that have not made transactions for a certain period of time need to reset their PIN number when they wish to resume transactions. This is why the bank counted new transactions based on changes in PIN numbers.

The case surfaced in February this year after a media report. The Financial Supervisory Service's sanction review committee is set to review punitive measures for Woori over the case, July 16.

Woori was marred by the mis-selling of financial derivative products referred to as derivative-linked funds (DLF) last year. The bank mis-sold the largest amount of funds managed by the troubled Lime Asset Management.

The FSC imposed a 19.7 billion won fine on Woori over the DLF case, but Woori filed an objection against the penalty in May.

Woori is also engaged in a suit against a separate sanction against its group chairman Son Tae-seung for his responsibility over the DLF case as the former Woori Bank CEO.

The sanction imposed in January bars Son from serving a second term, but Woori is seeking to cancel this.

Regarding the latest penalty, a Woori Bank official said, "The system errors occurred right after we set up a new system, at times such as the Chuseok holidays when transactions spiked. Now the system is stable and we have not seen any problems since."

"We have also changed the assessment system of employees so that they do not face a burden of short-term sales achievements," he said, regarding the PIN case.


Kim Bo-eun bkim@koreatimes.co.kr

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