FSS to focus supervisory capabilities in 2026 budget on emerging risks such as virtual assets and IFRS 18

South Korea’s Financial Supervisory Service (FSS) has concentrated its supervisory resources in its 2026 budget planning to address newly emerging risks, including virtual assets and the introduction of International Financial Reporting Standards (IFRS 18).

According to the “FSS FY2026 Budget” on the 12th, increases in the budget for IT projects and the electronic disclosure system (DART) share a common goal of reducing supervisory blind spots. Virtual assets and IFRS 18 are representative cases.

In the virtual-asset area, expanding analytics capacity for the “virtual-asset trading analysis platform,” which continuously analyzes large-scale transaction data, was again reflected as an ongoing task. As an effort to bolster infrastructure to detect price manipulation or anomalous trades early, it is designed to build a framework that monitors market-disrupting activities in near real time in tandem with initiatives such as improving the short-selling registration number management system and upgrading the insurance fraud detection system.

In disclosure and accounting, the introduction of IFRS 18 is cited as a key variable. As the income statement structure is set to be comprehensively overhauled, the FSS has put DART on the table not for a simple revamp but effectively as a redesign project. The plan is to enhance the XBRL-based disclosure framework and strengthen linkages with the exchange’s KIND system so that disclosed data can be used immediately as supervisory data. In parallel, it will also build a big data-based security monitoring system to prepare for an increase in hacking incidents.

This budget allocation is seen as an implementation step of the FSS’s “Financial Supervision Digital Transformation (DX) mid- to long-term program (2025–2027).” Through AI-based detection of unfair trading, microdata-driven credit and financial analysis, and the establishment of an always-on monitoring framework, the aim is to eliminate fragmentation in supervisory information. Still, some point out that overhauling closing and disclosure systems for IFRS 18 and strengthening data integrity management could translate into cost and staffing burdens for financial companies.