System flags suspicious stock sales, currency exchanges
Access environment and fund flows also analyzed
AML expert hired to bolster anti-money-laundering efforts
Kakao Pay Securities announced Thursday that it has built an AI-based fraud detection system and begun applying it to transactions this month.
The move comes as financial fraud schemes and the methods used to move criminal funds grow increasingly complex. The company said it plans to progressively strengthen its fraud response framework by centering it on the AI system and expanding its scope to cover anomalous transaction detection, anti-money laundering and consumer protection.
The system combines the company's existing fraud detection infrastructure with a machine learning-based risk analysis function. It learns from a wide range of transaction data and fraud cases to identify suspicious activity with greater precision, tracking correlations between transactions and detecting compound risk signals. When a suspicious transaction is flagged, the system presents the assessed risk level and the reasoning behind it to the responsible staff member.
The scope of detection has been expanded to reflect the nature of securities trading, where cash, stocks and foreign currency all change hands. Coverage now extends beyond deposits, withdrawals and account openings to include stock sales, currency exchanges, stock transfers to and from accounts at other brokerages, and changes to user information.
The system also analyzes the environment in which transactions occur and the flow of funds. It aggregates signals from transaction and access environments to flag suspected account takeovers, while monitoring deposit and withdrawal patterns and inter-transaction links to detect signs of abnormal fund movement — a safeguard designed to reduce the risk of accounts being used in voice phishing or investment fraud schemes.
The company has also reinforced its organizational structure and specialist staff. In March, it reorganized its operations to integrate anomalous transaction detection and anti-money laundering functions under a unified structure. In July, it brought in a specialist with 26 years of financial-sector experience in anti-money laundering and consumer protection to lead the effort.
Collaboration with the customer service center will also be strengthened. When a suspicious transaction is detected, the company said it plans to build out a seamless process covering user verification, guidance, consultation, protective measures and victim response.
"Building the AI fraud detection system gives us the opportunity to raise our overall response capabilities — across systems, organization and specialist personnel — so that users can trade with confidence," Kakao Pay Securities said.
The company has also been rolling out a range of new services aimed at improving customer convenience. In August, it launched a fractional trading service allowing investments in domestically listed stocks starting from 1,000 won. In September, it partnered with Kakao Bank to let users complete the entire process — from browsing stocks to placing buy and sell orders — entirely within the Kakao Bank app.
jiyun@heraldcorp.com
