[August 2025 – Seoul] — Korea has formally promulgated its long-awaited AI Basic Act, which will take effect in 2026. The legislation establishes a foundational framework for AI governance, addressing issues of accountability, transparency, and ethical standards across industries.
In parallel, financial regulators including the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) are accelerating revisions to industry guidelines for AI adoption in banking, securities, and insurance. These updates are intended to operationalize compliance in the sector, ensuring that AI-driven financial services remain fair, auditable, and aligned with investor protection principles.
The AI Basic Act sets out requirements for risk management, algorithmic fairness, and auditability. Regulators emphasize that its implementation will be closely tied to sectoral rules, particularly in finance, where algorithmic trading, robo-advisory, and risk analytics increasingly depend on AI.
Industry analysts note that Korea’s “strong regulation + strong technology” approach reflects an ambition to safeguard market order while encouraging innovation. By combining a national legal framework with detailed industry-level guidelines, Korea aims to reduce systemic risks while building investor trust in AI-powered markets.
The move also positions Korea as a regional leader in AI governance. With Europe’s AI Act and Singapore’s assurance frameworks moving forward, Korea’s legislation highlights an emerging global consensus: AI adoption in finance must be both innovative and compliant.