As most commercial banks here have undergone the transition from the conventional IBM-monopolized mainframe system to a Unix-based system, KB Kookmin Bank has now become one of the few remaining banks batting against the change.

Once the state-run Industrial Bank of Korea completes its system replacement early next month, only KB and Woori Bank will be left using IBM.

IBK recently announced that it would temporarily halt operations for three days early next month as it installs its new Unix-based Post Next-Generation banking system.

“Unlike the mainframe system, which is monopolized by IBM, the new Unix system offers lowers maintenance costs and is more compatible with other systems,” said an IBK official.

The mainframe, which marked its 50th anniversary this year, is widely considered to be outdated, the official added.

With the move to Unix, IBK will be joining other major institutions such as Shinhan Bank, Hana Bank, Korea Exchange Bank and NongHyup Bank, which completed their system transition in 2005-2009.

KB Kookmin Bank president Lee Kun-ho has strongly objected to the switch for his bank.

Late last year, the bank’s board unanimously decided to adopt the Unix-based system but in April, Lee suddenly vetoed the idea, citing critical flaws in the new system. The top banker was allegedly influenced by an email from the head of IBM Korea, who covertly offered better prices for maintaining the mainframe system.

The board, backed by KB Financial Group chief Lim Young-rok, dismissed Lee’s claims, and the two were locked in a feud for months regarding the system change. As a result of the fallout and misconduct at KB’s overseas branches, both Lim and Lee were issued with heavy sanctions by local financial authorities.

Lee stepped down earlier this month, but continues to claim that the Unix-based system is far from stable.

KB Financial Group chief Lim said IBM had tried to influence the bank.

“The entire banking industry was seen moving toward the Unix system, and this seems to have pushed IBM to make personal contact with the bank’s president and influenced his decision,” Lim said.

He also blamed Lee for toppling the group and bank’s plans for replacing what he saw as an outdated system.

In the aftermath of the sanctions and the absence of its president, KB Kookmin Bank decided to reconsider the system change.

Woori Bank also considered switching to a Unix-based system, but extended its contract with IBM last year when the IT firm offered lower prices.

By Bae Hyun-jung (tellme@heraldcorp.com)