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Chief Digital Strategy Officer to drive innovation
By Lee Min-hyung
The Bank of Korea (BOK) said Tuesday it would take full advantage of emerging digital technologies ― such as artificial intelligence and big data ― when devising monetary policies, as part of a crucial task for its drive for mid- to long-term growth.
Under the BOK 2030 initiative, the central bank said it plans to speed up adoption of digital innovation by enhancing research into related technologies and utilizing them when devising policies and managing market risk factors.
The initiative is expected to pick up steam by the end of the year when the BOK will establish a digital innovation division. The central bank also plans to name a deputy governor-level official as head of the unit by creating the new position of chief digital strategy officer.
"We will carry out in-depth research on AI, big data and blockchain to be in line with the rapidly-changing digital innovation here and abroad, which will help the central bank deliver more sophisticated economic forecasts and statistical data," an official from the central bank said.
The BOK expects such technologies to help it produce more accurate and precise GDP growth forecasts on an annual and quarterly basis with the help of massive big data sets from a number of economic indices.
The bank also said it will set up a state-of-the-art digital infrastructure with a view to improving productivity of overall work processes.
"The central bank plans to build a smart work environment by introducing digital co-work spaces and online research platforms," the official said.
Tightening research on CBDC
The central bank also noted that it would make thorough preparations for the possible issuance of a central bank digital currency (CBDC).
Central banks across the world are paying attention to the emerging digital currency. It has been less than a year since the notion of a central bank-issued digital currency started making headlines here and abroad.
The BOK did not confirm whether it would issue the currency, but underlined that it will continue mapping out detailed action plans to potentially issue one should it become necessary.
"To proactively deal with any changes in the payment market in the future, we will keep researching CBDC and review any technological and legal requirements in advance," the official said.
The central bank began a 22-month pilot test on developing its own CBDC in March 2020.
The decision was part of the BOK's efforts not to fall behind in the looming digital payment world, as some central banks, including those of China and some European countries, are accelerating moves to issue their own digital currencies.
"Some central banks are pushing for the use of a CBDC, and in the private sector, use of digital currency and fintech is rising rapidly," the BOK said in a statement. "Against this shift in the external market environment, the BOK has also felt the need to actively deal with a possible payment paradigm shift."
To back up the digital vision, the central bank plans to recruit more doctoral-level researchers for its IT sector, it said.
"The public expects the BOK to come up with more realistic and effective monetary policies after carrying out thorough research on not just the traditional monetary sector, but even social phenomena ― such as the low birthrate, aging population, climate change and rapid digital innovation ― all of which have to do with society and economy," the central bank noted.
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