Woori Bank May Be Disciplined for Repeated Breakdowns of Computer System

The Financial Supervisory Service (FSS) will start evaluating the management status of Woori Bank next week. As the bank’s computer system broke down on September 21 right before Chuseok holiday and caused great inconvenience to its customers, this evaluation will be especially focused on the bank’s IT system.

The evaluation of the bank’s management status was already scheduled as a regular biennial inspection, but the focus of the inspection will be put on the computer system failure that occurred on September 21. An error occurred in the electronic network system of Woori Bank at 8:30 a.m. on September 21 and transfer through smartphones, PCs, and online banking was suspended. Woori Bank said it had recovered its network at 10 a.m. on the day, but trading was delayed until 5 p.m., causing inconvenience to customers.

The FSS is thinking of disciplining Woori Bank, considering that the situation is serious. The bank has suffered similar accidents repeatedly. When Woori Bank started operating its next generation electronic network system, called WINI, on May 8, errors occurred in some mobile banking apps and accessing the app was delayed. A similar computer error was repeated on May 31, the first settlement date since the operation of the new computer system.

Woori Bank is paying attention to whether the latest system failure will affect its planned conversion to a holding company. An evaluation of its governance reform plan is scheduled for the middle of next month. The conversion to a holding company and the coming inspection and possible sanctions are separate matters, but if a problem such as a violation of related regulations is found during the inspection, it may affect even after the governance reform plan is approved.

If the malfunction of a financial institution's electronic system continues for a long time, the FSS may decide a disciplinary action based on Article 39 (Supervision and Inspection) of the Electronic Financial Transactions Act.

A Woori Bank official said, "We have taken measures to prevent the recurrence by increasing the capacity of the system hardware in which the problem occurred. We are thoroughly preparing for the upcoming inspection."

Regarding the accident, Woori Bank said on September 27 that it would not charge private customers transfer fees for non-face-to-face channel remittances for the next month. All the transfer fees for internet banking, smart banking and tele banking will be exempted from October 1 to October 31.

The bank also said that it would compensate all the transfer fees for customers who had to visit the bank as they could not use electronic transfer services due to the error on September 21.