TITLE: South Korea's Financial Supervisory Service Outlines 2026 Digital and IT Financial Supervision Strategy
BODY:
On March 4, 2026, the Financial Supervisory Service (FSS) held a briefing on its 2026 digital and IT sector financial supervision strategy, attended by approximately 350 representatives from financial companies, electronic financial business operators, virtual asset service providers, and related associations.
The FSS outlined a shift from reactive to preventive IT risk supervision, prioritising consumer protection as the primary objective for 2026. Vice Chairman Lee Jong-o emphasised that while financial digitalisation and artificial intelligence (AI) innovation have increased benefits for financial companies and consumers, risks including data breaches, system failures, and IT risks spreading through cloud and software supply chains remain prevalent. The FSS will strengthen digital resilience to minimise consumer harm and rapidly restore services when incidents occur.
Key initiatives include establishing an integrated cyber surveillance system (FIRST—Financial-IT Incident Response Surveillance control-Tower) operational from February 2026 to collect and disseminate cyber threat information; implementing third-party IT risk management guidelines; enhancing security controls through targeted inspections of high-risk institutions; and introducing punitive administrative fines and information security disclosure requirements. The FSS will support AI innovation in the financial sector while requiring financial companies to establish AI risk management frameworks, ethical guidelines, and internal controls. For electronic financial businesses, the FSS will strengthen user protection through expanded fee disclosure requirements, improved prepaid business practices, and enhanced management guidance. For virtual assets, the FSS will support establishment of a user-protection-focused regulatory framework through the proposed Digital Asset Basic Law, implement disclosure systems for virtual asset issuance and trading, and conduct targeted investigations into market manipulation and fraud.
The FSS commits to incorporating industry feedback from the briefing into supervisory activities and maintaining active communication with financial institutions, electronic financial operators, virtual asset providers, and experts through various channels.