Samjong KPMG: "Financial Sector Needs to Transition to 'Cloud' via Technology Convergence Platforms"

[Asia Economy Reporter Minji Lee] With the implementation of the revised Electronic Financial Supervisory Regulations, which include the expansion of cloud service usage in the financial sector, and the passage of the amended Data 3 Act in the National Assembly, opinions have emerged that the use of cloud as a new financial service platform will expand due to regulatory relaxation on cloud services.

According to the report "Innovation on the Cloud: Cloud Utilization Centered on the Financial Sector" published by Samjong KPMG on the 24th, a market environment has been created where cloud can be fully introduced in the domestic financial industry. It is expected that financial and fintech companies will benefit from cloud utilization not only to reduce costs but also to build innovative services.

Cloud computing is rapidly growing as a foundational technology to effectively manage and utilize the rapidly increasing data and create new value. According to Gartner's announcement in November last year, the global cloud market size is expected to grow at an average annual rate of about 16%, from $196.7 billion (243 trillion KRW) in 2018 to $354.6 billion (438 trillion KRW) in 2022.

As the importance of cloud increases, the report analyzed that innovative service development and customer-tailored service provision will become easier through big data analysis using cloud. The government has already recognized the importance and impact of cloud and continues to provide policy support. In addition to the revision of the Electronic Financial Supervisory Regulations and the passage of the Data 3 Act, the "2nd Basic Plan for Cloud Computing Development (2019-2021)" is also underway, based on three tasks: legal and institutional improvements for cloud utilization, strengthening market competitiveness centered on platforms, and creating a reliable ecosystem.

In overseas financial sectors, cloud is recognized as a basic IT infrastructure for implementing various technologies such as artificial intelligence (AI) and data analytics (D&A), and cloud adoption is underway. Global financial companies such as HSBC and Allianz apply cloud for regulatory compliance, risk management and analysis, service development, and improvement platforms.

Although domestic financial institutions currently limit cloud system use to non-critical systems such as internal operations and customer services, it is expected that new financial service development cases will gradually increase, taking advantage of regulatory relaxation that expands the scope of cloud utilization information to include personal credit information and unique identification information.

Accordingly, the report predicted that players in the financial industry must innovate by implementing extensive security certifications, data encryption, and effective data utilization to fulfill regulatory obligations and build trust with consumers. It also emphasized that financial companies and fintech firms should establish cloud system construction and transition strategies suitable for their organizations by considering the purpose of cloud adoption, development environment, and security, and that strengthening regulatory compliance monitoring to respond to ongoing security issues, as well as fostering and recruiting cloud specialists, is important.

Jae-bak Cho, Executive Director at Samjong KPMG, explained, "With the regulatory sandbox and the passage of the Data 3 Act, competition for innovative services will become more intense," adding, "It is time to actively consider cloud, which has low initial investment costs and offers scalability and flexibility for such services."

This content was produced with the assistance of AI translation services.