By Kim Jae-kyoung
Staff Reporter

The government has decided to revamp the security system of the nation’s online banking services to ease growing jitters about online transactions following recent hacking incidents.

The system of online security has been questioned after two young Koreans withdrew money from people’s bank accounts by hacking into the Internet banking system of a local bank a month ago.

At a meeting of economic ministers chaired by Finance-Economy Minister Han Duck-soo yesterday, the government introduced a set of measures to prevent would-be hackers from breaking into the Internet banking system.

It will enhance the personal authentication process. Under the measures, all the Internet banking services providers _ banks and securities and credit card firms _ are obliged to have their security systems automatically installed at customers’ computers when the customers first log on the online service.

In other words, customers will not be able to conduct financial transactions online without financial firms’ security programs, which prevent important personal information, including passwords, from being hacked into.

``The latest online banking accident at the Korea Exchange Bank took place while a victim entered personal information to download some programs from a hacker,’’ an official at the Ministry of Finance and Economy (MOFE) said.

``So far, customers are able to choose whether to set up the security system, but it will be impossible to use the Internet banking service without installing the safety program from now on,’’ he added.

Also, the government decided to enhance the procedure for obtaining an authentication certificate to prevent one’s certificate from being reissued by other people.

So the government plans to make financial firms give special passwords for the customers to receive or to introduce a short message service (SMS) authentication system via cell phones from the latter half of the year.

Furthermore, the government plans to conduct research on the security system of e-commerce transactions, including Internet banking and online shopping and introduce a guideline for safe online trading by the end of July.

There have been growing concerns over the security system of online transactions here after the two hackers stole 50 million won from other person’s account a month ago. They installed a hacking program at a computer on a PC room to find out personal identification numbers (PIN) used for Internet banking.

Online banking service users have been soaring for the past few years, due to convenience and lower transaction fees, according to the Bank of Korea (BOK).

The number of subscribers to online banking services reached 22.57 million at the end of March, up from 17.71 million at the end of 2002.

The number of online transactions _ such as account inquiries, money transfers and loan services _ totaled 10.35 million in the first quarter, up 29 percent from 8.01 million at the end of 2003.

Of the total, account inquiries made up 83 percent, with 8.59 million transactions, while there were money 1.76 million transfers totaling 11.05 trillion won, 17 percent of total online transactions.

It reported online banking accounted for 29.3 percent of total financial trading in March, up from 16 percent at the end of 2003.

kjk@koreatimes.co.kr