South Korea plans to phase out rules that keep financial firms’ internal networks separate from the internet, replacing them with an AI-based security framework. The shift could give banks and other firms broader access to cloud and AI tools, while raising the stakes of getting safeguards right.
Watch Desk analysis
What happened
The Korea Times reports that the Financial Services Commission will convene a task force this month, aiming to develop a replacement framework by the first quarter of next year. The changes are expected to be phased in, with institutions judged better prepared to manage cyber risks moving first.
The rules, introduced in 2013 after a cyberattack disrupted banks and broadcasters, have limited outside access to financial firms’ critical systems. Authorities also named 13 additional participants in a cybersecurity pilot that grants selected firms temporary exemptions to use AI-based security tools.
Why it matters
The policy tries to resolve a real tension: financial firms say restrictions can hamper access to cloud services and advanced AI systems used to detect attacks, while cybersecurity experts warn that lifting protections before adequate alternatives exist could create new openings for attackers.
The Korea Times reports that authorities received reports of 40 security incidents involving 37 companies from 30 September through Tuesday. The incidents exposed more than 473,000 records and involved at least 1 billion won in theft, according to the Financial Services Commission. Those figures give the proposed transition a pointed backdrop, not a guarantee that AI tools will prevent the next breach.
Our read
This is a consequential regulatory shift, not a simple switch from old rules to “AI will handle it”. The phased approach recognises that firms do not all have the same security readiness. The test will be whether access to useful tools expands without turning greater connectivity into a gift to attackers.
What to watch
- The task force’s proposed replacement framework and its first-quarter deadline.
- How authorities assess which institutions are ready to move first.
- Whether the additional pilot participants receive lasting exemptions or only temporary ones.
- Whether security incidents change as firms gain broader access to external systems.
Discussion spark: Should financial firms be allowed to connect more freely to cloud and AI security tools only after proving their safeguards, or should regulators set a faster timetable for lifting network separation?
Sources and evidence
- Source update (6 November 2026, 05:42 UTC)
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