Image Credits: Korea Times
South Korean government in a move toward embracing advanced technologies has announced plans to ease decade-old regulations that have mandated strict network separation in the financial sector. The Financial Services Commission (FSC) revealed that these changes will allow financial institutions to integrate generative AI, such as ChatGPT, into their internal networks as early as this year.
The current network separation rules, established in 2013, require financial firms to maintain a physical separation between internal and external networks to ensure security. However, this regulation has increasingly been viewed as an impediment to the adoption of cutting-edge digital services, particularly as cloud computing and AI technologies have become more integral to business operations.
FSC Chairman Kim Byoung-Hwan emphasized the need for regulatory adjustments to keep pace with the rapid digital transformation in the global financial industry. “We have reached a point where more efficient measures to separate networks are needed to address the rapidly changing digital environment, driven by cloud technology and generative AI,” he stated during an announcement event in Gimpo, Gyeonggi.
The revised regulations will permit financial firms to connect their internal systems to external AI models through a regulatory sandbox program. This exemption will enable these companies to utilize pseudonymized personal data for external processing, provided that stringent security measures are in place and that international partners agree to supervision by Korean financial authorities.
In addition to the AI integration, the government plans to expand the scope of cloud-powered software-as-a-service (SaaS) in financial firms. Currently, SaaS is limited to non-critical operations such as document management, but the new regulations will allow its use in more essential areas like customer relations and security management.
The regulatory changes, expected to take effect later this year, are anticipated to accelerate automation and big data utilization within the financial sector, driving innovation and enhancing competitiveness in the global market