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By Jun Ji-hye
NongHyup Bank, KOSCOM and other financial institutions here are rushing to abandon the use of Huawei equipment in their network systems amid growing security concerns, industry sources said Tuesday.
The financial sector's move to exclude Huawei has been apparently influenced by the Donald Trump administration's recent decision to blacklist Huawei amid the ongoing trade war between the United States and China, they said.
Last November, NongHyup Bank selected a consortium formed by KT and Huawei as a preferred bidder to carry out a 120 billion won ($100 million) project to update financial network systems of its branches nationwide.
But NongHyup has been putting off the project as security issues over Huawei equipment have been looming large, and it is expected to abandon the use of the Chinese equipment eventually.
"NongHyup is not expected to adopt Huawei equipment but to continue using existing Nokia equipment by upgrading it," a source said.
Regarding the issue, a NongHyup official said, "We have reviewed the issue and will make a decision within the week."
KOSCOM, an IT system provider owned by the Korea Exchange, has also decided to adopt Nokia equipment instead of Huawei's in its network systems upgrade.
KT, a partner in charge of the project, selected Nokia's equipment after testing it against Huawei equipment, according to sources.
They said the current geopolitical situation surrounding the Chinese company has apparently affected the decision.
Other financial companies such as Shinhan Bank and Hana Bank, which have used Huawei equipment, will have no choice but to consider replacing it amid concerns that problems could come up in securing related parts for maintenance, following the Trump administration's order that effectively bars U.S. firms from selling components and software to the Chinese tech giant.
Network equipment produced by Huawei is said to be price competitive and have technological prowess, but it has been subject to security concerns.
U.S. agencies have long suspected that the Chinese government or military may have installed backdoors in Huawei equipment for espionage activities, citing the fact that Huawei's founder is a former officer in the People's Liberation Army.
SK Telecom and KT, the top two mobile carriers in the nation, have already excluded the Chinese company from their fifth-generation (5G) partners.
The Chinese firm claimed there was no substance to any allegations regarding its equipment, saying its products and systems are used in over 170 countries and it has an excellent track record in cybersecurity around the world.
