Korea Investment & Securities Co., Ltd. recently suffered another computer system error in its stock trading platform. It was already the third such incident this year. Critics say the repeated failures raise questions about the company’s internal system management. Each time an accident occurs, the firm promises stronger oversight, but those pledges have not led to meaningful results. Some in the industry also worry that the frequent errors could damage customer trust, which is especially important in finance because it can directly and indirectly affect a company’s competitiveness.
CEO Kim Seong-hwan, who led the securities industry into an era of 2 trillion won in operating profit for the first time, set "Beyond Boundaries" as this year’s key slogan. He has stressed that "the overwhelming No. 1 we achieved is only a victory in the domestic league." Kim also outlined a broader vision, saying, "What we should be looking at is not the narrow South Korean market, but the global stage where giant players compete." Yet the company has ended up losing face over something as basic as a trading system error.
According to the securities industry on the 24th, the stock trading system error at Korea Investment & Securities Co., Ltd. occurred on the 15th. The company said in a morning notice that some customer accounts showed incorrect return rates. The problem involved cases in which the purchase price for balances was reflected differently for some customers who had sold shares on the 11th. Korea Investment & Securities Co., Ltd. said it was taking steps to address the issue and added that accurate return rates could be checked in the total assets details section of its application until the system was normalized. On the 16th, it said the misreported return-rate issue had been corrected for some accounts. However, it noted that some accounts including loaned and withdrawn balances may take additional time to reflect final returns depending on the processing procedure. Despite the company’s swift response, some investors reportedly filed complaints with the Financial Supervisory Service, saying they suffered unexpected losses after making trades based only on the return figures shown on the day the error occurred.
The problem is that this was not the first computer error in Korea Investment & Securities Co., Ltd.’s stock trading system. In March, an incident in the Mobile Trading System (MTS) caused retirement pension account balances and return rates to be displayed incorrectly. At the time, some investors protested that they trusted the displayed returns, made trades, and then suffered unexpected losses. In early January, another system failure in the MTS caused access delays in the morning on the "My Tab" and some pages, leaving users inconvenienced when checking holdings, deposits, valuation gains and losses, and trade history.
Whenever a computer error occurs in its stock trading system, Korea Investment & Securities Co., Ltd. has apologized for the inconvenience and said it would do its best to provide stable and reliable service. It has also said it regularly checks its servers and expands capacity and infrastructure.
Still, the errors keep recurring. That is why concerns are growing inside and outside the securities industry that there may be a problem with the company’s system management framework. Coincidentally, Korea Investment & Securities Co., Ltd. was fined 10 million won by the Financial Supervisory Service on the 15th of last month for violating its duty to ensure safety during computer program changes. From July 2018 to October 2022, it was found to have breached the Electronic Financial Transactions Supervision Regulation by skipping third-party verification when changing programs and by directly modifying production systems without copying them to development and test systems.
Computer errors in stock trading systems can lead to consumer damage and hurt a company’s image. That concern is even greater now, as the domestic stock market has been booming and trading activity has surged. Financial authorities have also recently emphasized the prevention of computer incidents in the financial investment sector and the need to secure trading stability. In March, the Financial Supervisory Service held the first Consumer Risk Response Council and said it would immediately launch inspections in the event of serious incidents involving frequent computer errors at securities firms and banks. It also stressed the need to strengthen internal controls and system management to prevent recurrence.
Meanwhile, Korea Investment & Securities Co., Ltd. said it was sorry for the inconvenience caused to customers by the recent computer error in its stock trading system. The company said the matter has now been resolved and that it plans to expand efforts to prevent similar system failures from happening again. A company official said, "In the case of the stock trading system error that occurred on the 15th, we issued a notice and took action because some customers could not see their profits and return rates in their balances." The official added, "Trading of balances and orders was possible without any problems." The official also emphasized, "We will review our systems to make sure this does not happen again."
Kim Se-hyung, fax123@sportschosun.com
