South Korea’s Financial Services Commission (FSC) has disclosed plans to allow financial companies to utilise generative artificial intelligence and cloud computing for product innovation, provided they implement adequate network security measures.
Since September 2013, financial institutions have been required to separate their networks from the Internet to prevent hacking attacks. This requirement has sparked widespread discussion and has been criticised for reducing work efficiency and stifling innovation.
The FSC acknowledged that network separation has contributed to a decline in the country’s financial competitiveness, particularly as the software market rapidly shifts from on-premise services to cloud computing-based Software as a Service. The regulator also noted the growing influence of generative AI across various industries.
Currently, financial firms are largely restricted from using AI or cloud computing, except for back-office operations. Under the new guidelines, these firms will be permitted to access the Internet for utilising new technologies once they implement and verify security measures with relevant agencies, such as the Financial Supervisory Service.
Additionally, the FSC will allow financial institutions to use cloud computing for certain essential front-office functions, including customer relationship management (CRM), after implementing appropriate security protocols.
The regulator anticipates that financial firms may begin using AI and cloud computing as early as the end of this year, following the implementation of necessary security measures.
The Financial Services Commission chief, Kim Byoung-hwan, has pointed out that the network separation rules must be adjusted to the evolving IT environment, including cloud computing and generative AI. This change is aimed at increasing financial industry competitiveness and enhancing the accessibility of services for consumers.
The decision to ease network separation restrictions is a compromise designed to enable more development and support the required security level within the economic sector. The FSC’s provision, which allows financial institutions in South Korea selective control over AI and cloud services, enables them to more successfully engage with global trends.
This policy shift is likely to have a considerable impact on the financial sector. Specifically, it may drive the creation of new AI, and cloud-based products and services, that enable companies to offer unique value propositions to customers. Moreover, this potential development aligns with the global trend of expanding various computing tools in the field of finance, which are becoming essential tools for maintaining a competitive edge and staying current with customer needs.
(Photo by Alexander Grey)
See also: Generative AI is a top driver for cloud investments
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