Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Financial regulator sets guidelines for AI-based credit rating models
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By Anna J. Park
By Anna J. Park
The Financial Services Commission (FSC), the country's top financial regulator, has set guidelines to facilitate financial firms' operation of AI-based models in a transparent and fair manner. The move comes as more financial companies in Korea adopt artificial intelligence (AI) technology.
The measures follow the regulator's new policy direction announced last August, aiming to activate financial firms' usage of AI technology while gaining consumer trust in the process.
First off, the FSC plans to check whether the AI-based credit rating models are safe and appropriate for assessing the credit standings of individuals. The financial authority plans to begin by the end of this year the verification of credit reporting companies that utilize AI-based models.
“Many credit bureaus use credit assessment models based on AI technologies; these AI-based models have strength in that they can assess far more databases and variables about an individual's credit evaluation, compared to traditional credit assessment models. However, as they use complicated algorithms which impair intuitive interpretation of assessment results, the FSC has come up with objective verification systems on these models in order to secure market trusts and consumer protection,” the FSC said.
The top financial regulator also announced on Monday financial security guidelines for AI use. Aiming to prevent leaks of personal information and data fabrications, the guidelines prescribe procedural steps to abide by when a financial company develops AI-based models.
The FSC explains that concerns are growing over the increased potential threats to personal security, as AI-based financial service models are widely utilized by financial firms. For instance, AI chatbot services could provide incorrect or deceitful information to consumers, if the chatbot operator fails to guard itself against security threats.
“In times of hyper-connected and hyper-convergence, AI is a core technology of innovative service development. In particular, the potential of AI utilization is greater for the financial industry. That's why the FSC will be carrying out tasks to secure the safe utilization of AI technologies and to win market trust,” the FSC stressed.