South Korea's Banks Arm AI Against Voice Phishing Wave

South Korea's banking sector and government are advancing an experiment to distribute treasury subsidies via digital currency, signaling a broader effort to integrate blockchain technology into public financial systems. KB Kookmin Bank, the nation's largest commercial bank with 34 million customers, is at the forefront of this initiative. It announced plans to create a voice phishing risk indicator for all customers, enabling personalized damage prevention efforts. The bank will strengthen its statistical and analytical capabilities and measure individual risk levels starting in 2025 to mitigate voice phishing threats. This measure aligns with government efforts to implement a no-fault liability system inspired by frameworks in the UK and Singapore, where financial institutions are held responsible for consumer damage without intentional negligence. The initiative is expected to have a widespread impact, given Kookmin Bank’s large customer base and the increasing sophistication of voice phishing crimes.

The government and banks are also responding to the growing frequency of voice phishing incidents. According to police data, the amount of damage caused by voice phishing last year reached 952.5 billion won, with the first half of 2025 showing a 95% year-on-year increase in damages, totaling 799.2 billion won between January and July. Voice phishing methods are becoming increasingly diverse, targeting specific demographic groups such as 50-year-old women impersonated during card delivery scams and 20- to 30-year-old men who face fraudulent employment schemes involving virtual asset transactions. To combat this, Kookmin Bank has doubled staff dedicated to detecting abnormal transactions and collaborated with its cryptocurrency affiliate Bithumb to establish a monitoring hotline. Starting this month, the bank plans to restrict access to virtual asset services for individuals involved in voice phishing activities.

The government is not the only entity taking action. Other major banks have implemented proactive measures to prevent fraud. Shinhan Bank launched a dedicated voice phishing counter in all 652 branches, while Hana Bank integrated a voice phishing detection feature in its mobile app, averting more than 1,000 incidents monthly. Woori Bank revised its non-face-to-face transaction liability standards, and NH Nonghyup Bank enhanced its monitoring of suspicious accounts. Internet banks such as Toss Bank and Kakao Bank have also joined the initiative, with Toss Bank strengthening its fraud compensation system and Kakao Bank introducing a mobile phone name theft prevention service. These collective efforts aim to reduce the rising toll of financial fraud and rebuild consumer confidence in digital banking services.

KB Kookmin Bank’s collaboration with virtual asset platforms underscores a broader regulatory and technological shift in the banking sector. The bank’s decision to establish a hotline with Bithumb reflects concerns over voice phishing incidents involving cryptocurrency transactions. As digital assets continue to play a more prominent role in South Korea’s financial ecosystem, banks are adapting their systems to address the unique risks associated with this evolving landscape. This includes the integration of artificial intelligence-based monitoring systems, improved user authentication protocols, and enhanced collaboration with crypto exchanges. These measures aim to strike a balance between innovation and security, ensuring that the benefits of digital finance are not overshadowed by vulnerabilities.

The growing emphasis on digital currency in public and private financial operations reflects South Korea’s broader commitment to leveraging blockchain technology for national development. The government has outlined plans to ease restrictions on institutional participation in cryptocurrency markets, allowing corporations and professional investors to open real-name accounts starting in 2025. Additionally, the Financial Services Commission (FSC) has introduced a pilot program enabling charities and universities to sell cryptocurrency donations, a shift from past regulations that prohibited institutional accounts on exchanges. These developments indicate a regulatory environment that is becoming increasingly accommodating to institutional crypto engagement while maintaining safeguards against speculation and money laundering.

Source: [1] KB Kookmin Bank will create a voice phishing risk indicator ... (https://www.mk.co.kr/en/economy/11413290) [2] South Korea FSC Chief Nominee Under Fire for Calling ... (https://finance.yahoo.com/news/south-korea-fsc-chief-nominee-165750116.html) [3] South Korea caps crypto lending rates at 20%, bans leveraged crypto loans (https://cryptorank.io/news/feed/a434f-south-korea-caps-crypto-lending-rates-at-20-bans-leveraged-crypto-loans) [4] South Korea Eases Crypto Restrictions for Institutions and ... (https://cryptodnes.bg/en/south-korea-eases-crypto-restrictions-for-institutions-and-charities-in-2025/)