South Korean financial firms to use AI to develop 'new innovative products'

South Korean financial firms will soon be permitted to use generative artificial intelligence (AI) and cloud-based software to develop "new innovative products," according to a statement released on Tuesday.

Since 2013, South Korean financial institutions have been required to keep their networks isolated from the internet to prevent hacking attempts, as noted by the Korean Financial Services Commission (FSC).

However, this network separation "may not only cause inconvenience but also hinder the competitiveness of the financial industry," the FSC press release stated.

To address this issue, the FSC has announced a regulatory exemption allowing financial firms to access the internet, provided they implement adequate security measures to mitigate cybersecurity risks.

The decision reflects the need to update network separation rules to better align with the rapidly evolving IT environment, particularly concerning cloud computing and generative AI, said FSC chief Kim Byoung-hwan in a meeting with relevant agencies and business leaders.

The FSC indicated that financial firms could begin utilizing AI and cloud computing by the end of the year at the earliest.