Financial firms to be allowed to use generative AI, cloud computing

Financial firms will be allowed to use generative artificial intelligence and cloud computing to develop new innovative products once they secure the means to ensure the security of their networks, the financial regulator said Tuesday.

Financial firms have been required to keep their networks separated from the internet since September 2013, a move aimed at preventing hacking attempts.

“Especially, network separation is being named a cause of a decline in the country’s financial competitiveness as the software market is quickly transitioning from on-premise service to cloud computing-based Software as a Service (SaaS), while the use of generative AI is changing the future of industries,” it said in a press release.

Currently, financial firms are virtually unable to use AI or cloud computing, except for back office purposes.

Network separation, however, has also been blamed for “work inefficiency” and failures to develop innovative products using new technologies, the Financial Services Commission (FSC) said.

The firms will also be allowed to make use of cloud computing for “some” essential front office purposes, including customer relationship management (CRM), after taking due security measures, it added.

The FSC said financial firms may be allowed to start using AI and cloud computing before the year’s end at the earliest.

They will be allowed to use the internet to make use of such new technologies once they take steps to prevent security risks and have them confirmed by related agencies, such as the Financial Supervisory Service, the FSC said.

“We are at a point where we need to improve network separation rules to better adapt to the quickly changing IT environment around cloud computing and generative AI,” FSC chief Kim Byoung-hwan said in a meeting with related agencies and business leaders.

“The proposed road map to improve network separation rules will lead to the enhanced competitiveness of the financial industry and also increased use of services by financial consumers.” (Yonhap)