What’s happening in South Korea and Japan

Japan – 40 regional banks consider system integration

Forty regional banks, including the Bank of Kyoto and the Bank of Yokohama, are considering switching their core systems to new systems with cloud. The aim is to shift from a mainframe to a cloud system that does not require hardware or data centers, leading to significant cost reductions.

However, there are to date few examples of bank systems that have become fully cloud-based. According to a 2021 report by the Financial Services Agency, only 10% of regional banks used the cloud for their core banking systems.

Cloud systems also pose challenges. When a system failure occurs, the impact tends to spread to the entire company that introduces it. The Financial Services Agency pointed out in its report that there are concerns about how it will respond when an accident occurs. Vendors are required not only to be efficient, but also to have systems that operate stably.

There may be concerns about the stability of cloud systems, but from the perspective of future cost reductions and environmental considerations, moves towards such integration will likely increase in the future.


KB Kookmin Bank and Microsoft – 'Financial Metaverse' technical cooperation

KB Kookmin Bank announced that it has signed a business agreement with Microsoft Korea for metaverse technology cooperation.

According to the agreement, KB Kookmin and Microsoft will discover and execute joint tasks in the field of augmented reality (AR), and develop financial content using AR and mixed reality (MR). The partnership also includes technical cooperation for convergence services between finance and metaverse, etc.

As the number of experiments related to the metaverse increases, considering whether there are any businesses that financial institutions can also take in will be a good source of information to help them take the lead in the intensifying fintech world.

NH Nonghyup Bank promotes the establishment of 'AI governance'

NH Nonghyup Bank announced that they are promoting the establishment of ‘AI governance’ for the first time in the South Korean banking industry.

Nonghyup Bank's 'AI governance' is a management system of organizations, policies and processes to prevent side effects of AI and to secure trust in AI service providers.

To this end, Nonghyup Bank conducts comprehensive consulting based on legal and AI expertise with companies equipped with AI technology capabilities. Establishment of internal regulations based on 'guidelines' is planned.

In South Korea, as the use of AI in financial institutions grows, the importance of AI governance guidelines is also increasing. We hope that such efforts will intensify in the future to provide more stable and secure financial services.