On the Security of Internet Banking in South Korea

Abstract

South Korean Internet banking systems have a unique way of enforcing security controls. Users are obliged to install proprietary security software – typically an ActiveX plugin that implements a bundle of protection mechanisms in the user’s browser. The banks and their software suppliers claim that this provides trustworthy user platforms. One side-effect is that almost everyone in Korea uses IE rather than other browsers.

We conducted a survey of bank customers who use both Korean and other banking services, and found that the Korean banks’ proprietary mechanisms impose significant usability penalties. Usability here is strongly correlated with compatability: Korean users have become stuck in an isolated backwater, and have not benefited from all the advances in mainstream browser and security technology. The proprietary mechanisms fail to provide a trustworthy platform; what’s more, alternative strategies based on trustworthy computing techniques are quite likely to suffer from the same usability problems. We conclude that transaction authentication may be the least bad of the available options.