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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] South Korea’s three major internet-only banks—KakaoBank, K Bank, and Toss Bank—have recorded a combined 163 IT system failures over the past five years, raising concerns over operational stability despite rising investments in digital infrastructure.
According to data submitted to Rep. Lee Yang-soo of the National Assembly’s Political Affairs Committee, a total of 163 system incidents occurred between 2021 and February 2025 across the three banks.
Toss Bank and KakaoBank each reported 64 incidents, while K Bank recorded 35 cases. The figure for Toss Bank excludes a recent foreign exchange glitch on March 10, in which the Japanese yen was mistakenly quoted at roughly half its actual value.
The error led to approximately 50,000 transactions totaling 28.38 billion won (about $21 million), along with around 600 related payment transactions in Japan. While Toss Bank moved to cancel the affected trades, about 567 transactions worth 1.4 billion won remained unresolved as of March 18.
Other incidents highlight ongoing system vulnerabilities. Toss Bank identified an error in its lending base rate nearly two years after it occurred, while KakaoBank experienced two separate mobile app outages lasting a combined 34 minutes on March 17. K Bank also failed to detect an interest rate error for 192 days.
In terms of customer compensation, Toss Bank paid the largest amount at 48.74 million won to about 10,700 customers, followed by KakaoBank with 1.94 million won to nearly 69,700 users, and K Bank with 210,000 won to 107 customers.
Although all three banks have implemented fraud detection systems and increased IT spending, critics say these measures have not been sufficient to prevent recurring incidents. This year, Toss Bank has budgeted 176.2 billion won for IT operations, up about 40% from last year, while KakaoBank and K Bank plan to spend 335.6 billion won and 160.1 billion won, respectively, marking increases of 37% and 23%.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
