| Korea Times file |
Open banking enables users to check all their bank accounts on a single application and transfer funds with it.
Data shows 1.02 million people registered 1.83 million accounts in the first week of the system's launch from Oct. 30 to Nov. 5. During this period, services available under the system were used 12.15 million times.
While the open banking system enhances convenience for users, it poses security risks, as it opens up once-closed networks to players in the system.
Currently the five major commercial banks ― Shinhan, KB Kookmin, KEB Hana, Woori and Nonghyup ― and the regional banks of Busan, Jeju, Kyongnam and Jeonbuk and the Industrial Bank of Korea (IBK) are taking part.
Eight others, including more state-run, foreign, regional and internet banks, are set to join. In addition to banks, fintech firms will also join the system, which may pose further risks.
More players being able to access customers' financial data may increase risks of the data being abused.
There are no regulations that clarify who holds responsibility under the open system, especially in cases involving data breaches or cyberattacks for example.
Authorities and financial firms appear cautious to elaborate on the risks while they seek to promote the open banking system.
"There have always been security risks and that is why the Korea Financial Telecommunications & Clearings Institute is checking up on firms so that such problems do not arise," said Jung Yoo-shin, head of the Fintech Center Korea.
He said because the system is in its early stages, those involved "will begin discussing and establishing necessary groundwork" for such issues as the system grows and expands.
Financial Services Commission (FSC) Chairman Sohn Byung-doo urged financial firms last week to "take responsibility and monitor and manage risks that arise from outsourcing IT tasks" at the Financial Information Security Conference in Seoul.
The FSC has secured 2.23 billion won ($1.93 million) to assist the growth of fintech and 985 million won for the firms to beef up security.
The government's financial help is available for innovative startups that have been temporarily exempted from regulations and entities that are set to take part in open banking. The government will cover 75 percent of the costs that firms incur for security check-ups.