SEOUL, Aug. 21 (Korea Bizwire) – Security loopholes have been found in the newly launched South Korean internet-only bank Kakao Bank, as a number of cases of identity theft have been reported to the company.
According to Kakao Bank on Sunday, up to ten reports were filed after users found out either a bank account was set up or a small loan was taken out under their name without their consent.
So far, most cases have turned out to be between family members, such as a partner or children and grandchildren who have easy access to account holder’s personal information.
Kakao Bank uses a three-step verification process consisting of a mobile phone number, a picture of an ID card and another bank account under the user’s name.
Though it is not easy to gain access to all of the above, it is not impossible for those close to account holders such as family members to get ahold of a phone or proof of identity, leaving room for more security threats to come in the near future.
While officials at Kakao Bank say they are looking at possible countermeasures to prevent similar issues from occurring again, around 20 cases of internet fraud have been reported to K bank, the first South Korean internet-only bank, where victims were deceived into sending personal information to strangers.
While no reports similar to what happened among Kakao Bank users have been filed, industry experts argue security loopholes between family members can cause similar problems to K bank, as the country’s very first internet only bank allows users to choose between two options, one being on live video camera while holding proof of identity and the other being checking information about the latest transactions of another bank account under the user’s name.
Opting for the latter means family members who can easily get their hands on bank account details can evade K bank’s verification process.
Internet-only banks have been proving a great success in recent months in South Korea, with Kakao Bank attracting over 800,000 accounts just four days after its release last month, boasting combined deposits and loans above 500 billion won (US$445.2 million).
Ashley Song (firstname.lastname@example.org)