South Korea’s Financial Services Commission (FSC) has announced plans to permit financial institutions to leverage generative artificial intelligence and cloud computing for product innovation, as long as they implement appropriate network security measures.
Since September 2013, financial firms have been mandated to segregate their networks from the Internet to thwart hacking attempts. This mandate has sparked debates and received criticism for hampering work efficiency and stifling creativity.
The FSC has acknowledged that network separation has contributed to a decline in South Korea’s financial competitiveness, especially as the software market transitions from on-premise services to cloud-based Software as a Service and the increasing influence of generative AI across industries.
Currently, financial institutions are predominantly restricted from utilizing AI or cloud computing, except for back-office functions. However, under the new guidelines, these firms will be allowed to access the Internet for adopting new technologies once they establish and validate security measures with relevant agencies such as the Financial Supervisory Service.
Moreover, the FSC will permit financial entities to utilize cloud computing for specific essential front-office tasks like customer relationship management (CRM) after implementing suitable security protocols.
The regulator foresees that financial firms may start employing AI and cloud computing by the end of this year following the implementation of necessary security measures.
Kim Byoung-hwan, the head of the Financial Services Commission, has highlighted the need to adjust the network separation regulations to align with the evolving IT landscape, including cloud computing and generative AI. This adjustment aims to enhance the financial industry’s competitiveness and improve service accessibility for consumers.
The decision to relax network separation restrictions is a compromise intended to foster more development while maintaining the required security level within the economic sector. This provision by the FSC, granting selective control over AI and cloud services to financial institutions in South Korea, enables them to better engage with global trends.
This policy shift is expected to significantly impact the financial sector by potentially catalyzing the creation of new AI and cloud-based products and services that offer unique value propositions to customers. Furthermore, this development aligns with the global trend of expanding various computing tools in the finance field, essential for maintaining a competitive edge and meeting customer needs.
(Photo by Alexander Grey)
**See also: Generative AI is a top driver for cloud investments**
Want to delve deeper into cybersecurity and cloud technologies with industry experts? Explore Cyber Security & Cloud Expo events happening in Amsterdam, California, and London. Discover more upcoming enterprise technology events and webinars powered by TechForge here.
Tags: AI, cloud, Digital Transformation, generative AI
