The core of the dispute

Network separation rules currently require financial companies to keep internal systems disconnected from the public internet, a measure designed to prevent hacking and data breaches. The rule, however, also prevents financial workers from using generative AI tools in the course of their duties, prompting industry calls for a revised framework that would allow controlled AI use.

The FSC has opened the issue for public discussion through its regulatory review process, with the discussion centered on how to balance security requirements against the competitive need to adopt AI technologies.

Relaxation arguments vs. cautionary voices

Proponents of easing the rules argue that rigid network separation leaves Korean financial firms at a disadvantage as AI becomes central to productivity and customer service. They call for alternative safeguards, such as allowing AI use under controlled conditions instead of an outright ban.

Opponents counter that the financial sector remains a prime target for cyberattacks and that relaxing separation requirements could open pathways for data leaks and system intrusion. They urge a cautious approach until security measures can reliably offset the added exposure.

The FSC has not finalized a decision on whether or how the rules will be amended, and the outcome of the debate remains open.

The claim that the financial sector's network separation framework has hesitated in the face of AI adoption, caught between relaxation advocates and those urging caution, is Mostly True.