Elevating the Internal Control Framework
IBK enhanced its internal control framework and bolstered financial incident prevention capabilities by advancing control activities across policies, processes, and IT systems.
Establishing and Operating the Responsibilities Map
IBK allocates the CEO's seven overarching management responsibilities to each group head and operates a system under which implementation status is reported to and reviewed by the Internal Control Council. The bank systematically documents the CEO's internal control activities by digitally managing implementation plans and tracking action items related to executive directives.
IBK built an IT system that continuously monitors the implementation status of the Responsibilities Map and records internal control activities performed by executives and employees across the organization. The bank developed management duty implementation guidelines, streamlined inspection procedures, and improved training to enable employees to carry out their responsibilities seamlessly. The operating frequency of both the Internal Control Committee and the Internal Control Council was increased beyond internal regulatory requirements, maintaining a more rigorous oversight framework.
Reinforcing Internal Control Systems for Financial Incident Prevention
IBK analyzed cases of wrongful loans across the banking sector and reinforced its internal control systems by focusing on vulnerable areas within the credit business. The bank revised its Financial Incident Prevention Guidelines to reinforce credit process control items, included credit officers among personnel subject to the mandatory leave policy, and expanded both self-audit items and audit procedures for real estate-secured loans.
To prevent financial incidents during the managerial approval process, the bank revised its authentication framework, replacing password-based authorization with biometric and mobile authentication methods. IBK strengthened pre-credit controls, established a grading system for managing guidance items, and expanded the scope of headquarters-level continuous monitoring, raising management standards for high-risk operations.
Building and Advancing Internal Control IT Systems
IBK built a continuous monitoring system to reinforce surveillance and post-management of high-risk operations, while expanding the scope of automated inspections. The bank refined detection criteria for anomalous transactions—such as repeated credit extensions to the same borrower and unusually large cash deposits—and computerized the tracking and follow-up management of guidance items.
Additionally, IBK upgraded its self-audit system by digitizing manual processes, including data collection, approval, and recordkeeping. Automated provision of audit-related statements and the introduction of electronic approval workflows improved both audit efficiency and transparency.
Conducting Internal Control Inspections for Financial Incident Prevention
IBK carried out inspections based on financial incident patterns to identify transactions that were identical or similar to past cases of misconduct. The bank reviewed after-hours cash withdrawals and vulnerable lending processes to proactively detect potential risk factors. It also conducted inspections at 142 branches, focusing on key areas such as spot management, collateral management, and overall import-export transactions, providing guidance and implementing corrective measures where deficiencies were identified.
Inspection results are reported to the Board of Directors and the Internal Control Committee, where they serve as a basis for reviewing and improving the effectiveness and operational status of internal control policies.
Elevating the Compliance Support Function
IBK upgraded its overall compliance support function to strengthen financial incident prevention capabilities. The bank restructured its internal whistleblower channel into a compliance reporting system with enhanced anonymity, reinforcing whistleblower protections and expanding the reward program to promote a self-regulatory internal control environment.
External consulting informed improvement plans covering the compliance organization, workflows, and HR management. Based on these plans, IBK reorganized its structure by establishing the Internal Control Inspection Team, the Accountability Management Team, and the Customer Identification Team. Expanded staffing also enabled IBK to meet the compliance personnel target set by the Financial Supervisory Service.
To promote a culture of compliance, the Chief Compliance Officer conducted on-site exchange sessions through direct visits to branches, sharing financial incident cases, regulatory compliance and internal control policies, and key considerations for complying with AML requirements and financial sanctions.
To strengthen employees' regulatory compliance capabilities, the bank invited specialist attorneys from external law firms to provide legal training on topics including the Commercial Act, the Yellow Envelope Act, and the Fair Trade Act. Department-specific compliance training was also delivered, covering information barriers, the Volcker Rule, advertising and terms-of-service reviews, and external activity reporting.
Activities to enhance integrity and tighten conflict-of-interest management also continued. Analysis of integrity assessment results and financial incident case studies informed improvement measures, while Chief Compliance Officer-led traveling training sessions promoted integrity awareness across the organization. IBK achieved an "Excellent" rating in the 2025 Comprehensive Integrity Assessment. Regarding conflicts of interest, the bank implemented case-based special training to raise employee awareness. The Chief Compliance Officer also held regular meetings with participation from the parent bank and subsidiaries, sharing key issues including regulatory compliance and internal control policy directions. These meetings deepened the group-level compliance cooperation framework.
Legal training by an attorney-at-law
IBK Financial Group's Chief Compliance Officers' Meeting
Strengthening Responsiveness to AML and Financial Sanctions
IBK introduced a system in which headquarters pre-reviews Know Your Customer (KYC) procedures performed at branches before financial transaction agreements are executed with corporations and organizations, proactively preventing regulatory violations related to KYC operations. Comprehensive verification of KYC documentation—covering completeness, authenticity, and appropriateness—enables the bank to preemptively block transactions with high regulatory violation risk, reinforcing the KYC internal control framework.
In response to the evolving international regulatory landscape, IBK deployed a foreign exchange message filtering system aligned with the international standard message format revision (ISO 20022) adopted by SWIFT. Leveraging structured data, the system enables more precise screening and elevates financial sanctions compliance capabilities. IBK continues to advance its AML and financial sanctions compliance framework in line with global regulatory developments and changes in financial infrastructure.