Hana Bank will introduce a financial incident indicator monitoring system utilizing artificial intelligence (AI) in the second half of the year. Additionally, to strengthen internal controls, it will increase the number of ad hoc inspections conducted by the inspection headquarters.
According to data submitted by Hana Bank to Lee In-young, a member of the Democratic Party of Korea, on the 20th, Hana Bank is in the process of creating a financial incident early warning detection system using AI. This system will be used to detect the risk of incidents occurring in Hana Bank's entire loan portfolio in real time. If the risk level of a specific loan rises above a certain threshold, the AI will be designed to automatically report it to the inspection department. Currently, Hana Bank is also in the process of building a classification of risk items by type of credit, correlations between risk items, and other related factors. This system is expected to be introduced into inspection operations in the second half of this year.
Hana Bank will also broaden the scope of its own ad hoc inspections. After the introduction of the AI inspection system, if an increase in the risk level of certain risk items is detected, the inspection department will initiate early checks on related loans. Additionally, rather than being tied to specific loan types, there are plans to reclassify high-risk loans periodically based on domestic and international conditions. This aims to include loan types that were not previously subject to inspections. For example, if real estate project financing (PF) was classified as the only high-risk loan type until now, considering recent economic conditions, small and medium-sized enterprise loans could also be classified as high-risk types.
In addition, Hana Bank will strengthen its verification procedures to filter out false documents. This is a measure to increase the responsibility of bank employees who are granting loans at branches. Additional procedures, such as on-site inspections of lease contracts before loan execution, will be included. Hana Bank expects that if this improvement plan is successfully implemented, it will detect financial incidents more efficiently than currently. Since it is difficult to completely prevent all financial incidents solely through human effort, the main purpose of the improvement plan is to enhance the efficiency of inspection work and reduce the scale of incidents.
Hana Bank has developed internal control improvement measures in light of recently revealed unfair loans. Hana Bank announced last month that it had experienced unfair loans amounting to 7.47077 billion won. This involved a branch employee accepting money and issuing operating and facility loans to corporations from 2021 to 2023. Although there were inspections by the Financial Supervisory Service (FSS) and the bank's own checks during the loan process, Hana Bank failed to detect them. This was because the inspections by the FSS and the bank's checks focused primarily on real estate collateral loans. Therefore, Hana Bank is in the process of restructuring its internal control system to consider the possibility of incidents across all areas, not just in cases with a history of past issues.
A spokesperson for Hana Bank said, "Based on an analysis of major incident cases, we will improve our work processes and increase financial incident prevention training for branch employees."