SecurityNov 5, 2026, 7:32 AM UTC·2 min read

South Korea to Fully Lift Network Separation Rules for Banks

South Korea's financial regulator will scrap the strict internal and external network separation rule for the sector, citing the need to fight AI-driven hacking with AI.

Financial Services Commission chairman presenting South Korea's plan to fully lift network separation rules for banks at a security institute in Yeouido, Seoul. — Image: zdnet.co.kr

South Korea's financial authorities plan to fully abolish the long-standing rule that forced banks and other financial firms to keep their internal and external networks strictly apart. The move is a response to increasingly sophisticated hacking threats powered by artificial intelligence.

Financial Services Commission Chairman Lee Eog-weon announced the plan, titled "Security System Innovation Plan for the AI Era," on Thursday at the Financial Security Institute's branch in Yeouido, Seoul. The commission had eased the rule for security purposes in June and was pursuing a phased rollback. Full removal now arrives just five months later.

Why the rule is going

Under the network separation regime, financial companies had clear limits on using new technologies such as AI as active defensive tools. The rule had also been criticized as a barrier to innovation in the sector. Regulators now say they want security infrastructure that answers AI attacks with AI.

Task force and permanent exceptions

A task force on full deregulation of network separation was launched the same day. It brings together government ministries, related agencies, private AI and security experts, and executives from across the financial industry. Its agenda covers data protection tiered by importance, application of zero-trust principles, the scope of responsibility for CEOs and chief information security officers, and business continuity plans after a breach.

The exceptions that have so far applied temporarily when firms use AI and software-as-a-service for security purposes will become permanent. Instead of relying on time-limited relief through non-action letters, authorities will amend the Electronic Financial Supervision Regulation. The aim is to let financial firms routinely use AI to inspect source code and quickly patch vulnerabilities.

Regulators will also keep easing network separation for other emerging technologies, including blockchain, through the designation of innovative financial services.

Lee said a financial company that cannot protect customers' information and assets "has already lost its reason to exist," adding that it is time to overhaul security systems and move away from existing practices.

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Tags:south koreafinancial servicesnetwork separationai securityzero trustfsc