Data Protection, the First Step for Safe Financial Transactions

• The importance of data protection is growing in preparation for the leakage of personal information of customers and financial crimes along with the increasing number of customers using financial services through digital channels. Data leaks involving a large number of customer information and shutdowns of transaction systems lead to significant reputation damage to the related financial company and massive costs to the entire company due to customer compensation and system repair, etc. Financial institutions are introducing new technologies such as AI, big data, and cloud computing to control data protection risks and innovate their security capabilities.
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• Shinhan Financial Group establishes a collaborative system with outside data protection specialists in order to respond to information protection risks. We operate the Future Treats Council with the attendance of experts from academia, business, and public institutions to gather threat information regularly and conduct frequent security checks with a group of white-hat hackers each year. Also, the group’s subsidiaries jointly developed a data protection portal for security checks at the group level by collecting data of core business areas. We upgraded the integrated security control system to strengthen comprehensive security control functions.
  
  The Fraud Detection System (FDS) is a fraudulent transaction detection system that identifies and blocks financial fraud by comprehensively analyzing information about access to electronic financial transactions, transaction details, etc. Shinhan Card conducts fine-tuned control on e-transactions by categorizing them as 10 items including highly-risky business, day and night transaction, multiple and small amount transactions, face-toface and non-face-to-face transactions. Recently, Shinhan Card maximizes the detection rate by applying deep learning and AI solutions, and the latest machine learning algorithms. After adopting AI-based machine learning methods, its accuracy rate of detecting illegal use of credit cards in the category of overseas offline transactions increased by 6.5%p from 89.5% to 95% in the second half of 2017.
  
  Shinhan Financial Group also strengthened its security level by utilizing the self-developed security software Patch Management System (PMS) to protect customers’ information. With such efforts, the group does its best to keep all major software to their latest versions and prevent malicious programs from abusing weak points.
  We also adopted the biometric authentication to strengthen user identification system for the protection of personal data and successfully upgraded our data protection level. The biometric information of customers is stored in their mobile devices such as smartphones and the authentication related information is stored in the system server of the Korea Financial Telecommunications and Clearings Institute (KFTC) to reinforce security. Also, individual group subsidiaries are making efforts with data scattering, data encryption for reception and transmission, and distribution of temperature sensing films to avoid the exposure of numbers in security cards.