台新新光金控

[New Financial Frauds -Counterfeiting and AI-assisted Frauds] - Technologic

In the Risks Report 2025 published by the World Economic Forum (WEF), fake news generated by AI has topped the list of the "biggest risk facing the world in the next two years" for two consecutive years. The number of financial crimes has increasing rapidly due to the widespread use of generative AI. According to statistics from the Criminal Investigation Bureau, there were a total of 122,805 fraud cases in 2024, a significant increase from 37,823 cases last year. Among which, fake investment fraud was the most serious, with 43,015 cases and financial losses of NT$37.22 billion. Due to the widespread use of AI, risk of traditional financial fraud continues to rise as a result of the complex fraudulent techniques and increased difficulty of identifying them.

• Through generative AI, Deepfake voice and image technology, scammers forge the identities of financial institution employees or customers to commit crimes such as online banking frauds, investment frauds and fraudulent loans. Such frauds may not only cause financial losses to
  customers, but also affect banks' reputation and customer trust.
• AI-generated fake news and erroneous financial information may also exert a serious impact on market stability and investor confidence, and in turn affect Taishin's own business activities.

• Enhancing information security monitoring and fraud prevention mechanisms: We will establish a security operation center (SOC) to enhance real-time monitoring and response capabilities in order to swiftly identify and block potential risks. At the same time, the risks of fake identities and fraudulent transactions may be reduced by strengthening identity recognition technology, such as multi-factor authentication and enhancement in KYC and audit mechanisms.
• Payment security and fraud prevention: Taishin Bank leverages AI technology to analyze suspicious transaction patterns and abnormal behaviors, and has developed the "Taishin War God Model" to identify the latest fraud patterns. The model can instantly identify suspected fraudulent transactions and issue warnings. Once suspicious behavior is detected, it will immediately block fraudulent transactions. Taishin Bank cooperates with the public sector to share fraud intelligence and improve overall fraud prevention capabilities. In addition, it actively promotes consumer education and raise awareness of payment security and credit card risks to reduce the occurrence of frauds.
• Establishing a warning and abnormal transaction handling mechanism: The Company will strengthen identity authentication and transaction review of abnormal accounts involving suspected fraud crimes, take control measures such as freezing and suspending transactions, and notify the judicial police authorities as and when necessary. Transaction records for relevant operations should be retained, and regulations governing AML and CFT should be implemented. Abnormal account information should be shared with peers to enhance financial security.

[Turmoil in Global Economic Markets] - Economic

According to the "Economic Situation and Outlook in 2025" published by the National Development Council, Taiwan's economic growth rate in 2025 could reach more than 3%. However, international political and economic uncertainties, geopolitical risks, China's economic downturn and climate change may have made the outlook for the global economy and markets uncertain.

Since returning to the White House, U.S. President Trump has introduced a number of tariff measures and may impose additional tariffs on more imported goods. Countries affected by tariffs may take countermeasures. Trade barriers between global economies will rise, resulting in an increase in the risk of a global economic downturn.

• High tariffs will directly lead to higher costs of imported goods, reduced consumer purchasing power and lower corporate competitiveness, which may result in weaker overall demand and affect economic stability.
• The risks posed by ongoing regional conflicts to international trade may increase uncertainty in shipping costs of customers.
• Regional conflicts will create barriers to international trade (such as the U.S.-China trade war and the U.S. tariff increase), affect the uncertainty of capital flows and restrict transactions in specific products, thereby increasing credit or non-credit risks.

• Continuously strengthening risk monitoring and early warning mechanisms: We will continue to monitor tariff developments and their impact on various markets, and adjust response measures as and when appropriate.
• Adopting diversified trading portfolio and dynamic asset allocation to diversify risks: We will adjust trading portfolio according to market changes, diversify market volatility risks, and avoid over-reliance on a single type of asset or market. We will utilize financial instruments to hedge related market volatility risks and ensure the stability of the asset portfolio.
• Reducing leverage and strengthening liquidity management: In an event of increased market uncertainty, we will reduce leverage appropriately to ensure sufficient liquidity in trading operations to cope with extreme market conditions.

[Information Security - Introduction of AI and Cloud Services] - Technologic

Artificial intelligence (AI) and cloud services can improve business operational efficiency, but also pose challenges to information security. AI may affect information security and decision-making accuracy due to training data bias and hacker attacks. Cloud services, on the other hand, involve risks such as insufficient data access control, supplier security vulnerabilities, and DDoS attacks, which may lead to the leakage of confidential information or system paralysis. Hackers can attack software suppliers and implant malicious programs in the bank's core systems or payment platforms, causing large-scale information security incidents.

• The introduction of AI and new fintech products is expected to reduce costs and improve productivity, but it may also increase the risk of theft of customer information or assets. The risk of confidential information of Taishin FHC or its subsidiaries and relevant customer information becoming the target of cyber crime may also increase.
• Third-party software and cloud services expose the company to the risk of software supply chain attacks. Hackers can attack software suppliers and implant malicious programs in the bank's core systems or payment platforms, causing large-scale information security incidents. If critical business systems are affected, this may lead to business interruption, leakage of customer information and even regulatory penalties.

• Enhancing information security protection and monitoring: The Company has established a comprehensive information security management framework and introduced a data loss protection (DLP) system to strictly control the access and transmission of sensitive information to prevent the risk of data leakage. The information security protection mechanism covers technologies such as firewalls, email auditing and web security gateways, and is adjusted and optimized based on the latest information security environment.
• Information security education and cross-departmental collaboration: The Company has joined the Forum of Incident Response and Security Teams (FIRST) to proactively collaborate with outstanding teams in response to changing and complex cyber threats. It has also actively participated in domestic and international information security joint defense organizations to jointly respond to borderless cyber threats, thereby enhancing the overall resilience of the global information security protection network.
• Cloud resources and artificial intelligence (AI) governance: The Company has strengthened the information security assessment of cloud services, identified potential risks, and regularly reviewed the security of cloud resources to ensure the stability and compliance of data storage and transmission. With respect to AI technology application, the Company has introduced AI guidelines promulgated by the competent authorities, formulated policies on the use of AI to ensure data privacy and fairness, established AI governance regulations and control measures, and built a trustworthy and responsible AI system to ensure compliance with ethical and regulatory standards.

Use AI and big data to identify credit card customers, and add a NCCC ACS system module verification process. No password verification is required for low risk network transactions, providing customers with a faster purchase experience. 

Having the systems automatically generate irregularity reports in order to increase audit efficiency and enable early identification of fraud and corruption committed by financial advisors. Aimed to prevent failure to identify irregularity when a financial advisor shares one mobile device with a customer.

Automatically issue life insurance payment slips through the system, effectively reducing the rate of erroneous issuance, enhancing the printing and management of blank forms, significantly improving operational efficiency, eliminating the collection of policyholders' checks by salespersons, effectively controlling the risk of check loss, improving service quality, and strengthening the prevention of salespersons from misappropriating premiums.