Korea to Fully Lift Network Separation Rules for AI Security

The FSC's decision to remove network separation rules represents a strategic shift, driven by the increasing sophistication of AI-powered cyber threats. While network separation traditionally secures sensitive data by isolating internal systems, this approach can also hinder the integration of advanced AI security tools. These tools often require broader network access to monitor traffic, detect anomalies, and respond to threats in real-time.

By lifting these restrictions, the FSC intends to allow financial institutions to deploy more advanced AI-driven defenses. The stated goal is to build a security system that uses AI to defend against AI attacks, moving beyond static perimeter controls. This change will apply selectively; firms must demonstrate strong AI and security capabilities and implement alternative security measures to qualify.

The policy follows recent security incidents, including breaches across banking, insurance, brokerages, and virtual asset service providers, which suggest existing security frameworks were insufficient. In response, the FSC is also expanding its regulatory oversight to include virtual asset service providers and other non-financial entities linked to financial services, while holding executives accountable for security failures.

The effectiveness of this policy hinges on the practical implementation of new AI systems and the rigor of the alternative security measures. The source material outlines the policy's intent and conditions but does not detail how "strong AI and security capabilities" will be objectively assessed or what specific alternative security measures will be mandated.