FSS to shift digital and IT supervision to a preventive approach

South Korea’s Financial Supervisory Service (FSS) will shift its information technology (IT) oversight framework for the financial sector from ex post measures to preventive supervision.

On the 4th, the FSS held a “2026 Digital and IT Financial Supervision Briefing” at its headquarters in Yeouido, Seoul, and announced supervisory and inspection priorities reflecting the shift.

The briefing was organized to put consumer protection first and build a safer digital finance environment, as cyber incidents in the financial sector have become more frequent and risks are spreading through cloud and software (SW) supply chains.

To enable real-time monitoring of IT risks, the FSS will begin full-scale operation of the Financial Security Integrated Monitoring and Control System (FIRST). The system is designed to collect and disseminate cyber threat intelligence in real time so that financial institutions can respond proactively.

In particular, it plans to support amendments to the Electronic Financial Transactions Act to stipulate in law that the CEO bears ultimate responsibility for ensuring transaction stability, and to guarantee the authority and independence of the chief information security officer (CISO). In the event of an incident, it will introduce a punitive penalty regime that allows fines of up to 3% of total revenue, heightening financial firms’ vigilance.

It will also strengthen measures to protect settlement funds to enhance stability in the payments market. To prevent a повторение of the so-called “TMEP” incident, it will mandate external management of settlement funds at payment gateway (PG) companies.

For the virtual asset market, it will support second-stage legislation of the “Digital Asset Framework Act” and establish a user-protection-centered regulatory framework. To this end, it will create a dedicated team within the Virtual Asset Supervision Bureau and set up a disclosure regime related to issuance and trade support.

It also plans to use artificial intelligence (AI) to monitor text data in real time—including social media and news articles—and conduct strict investigations into unfair trading practices such as price manipulation.

Regulatory improvements for AI innovation and data use will proceed in parallel. The FSS will present an “AI Risk Management Framework (AI RMF)” so financial firms can manage AI risks autonomously, and will establish AI ethics guidelines for the financial sector to bolster trust.

No Jeong-dong, Hankyung.com reporter dong2@hankyung.com