At the 'APEC 2025 Digital Finance Workshop'
"Maximizing Benefits and Minimizing Side Effects Is Essential"
"Central banks, financial policy authorities, and international organizations must work together to minimize the side effects of digital innovation while maximizing overall benefits."
Yoo Sang-dae, Deputy Governor of the Bank of Korea, emphasized this during his opening remarks at the 'APEC 2025 Digital Finance Workshop' held on the 5th in Gyeongju, Gyeongsangbuk-do. He stated, "The powerful wind of digital innovation cannot be stopped, but if we adjust the sails well to harness that wind, we can move forward."
Yoo Sang-dae, Deputy Governor of the Bank of Korea, is speaking at the joint press briefing on the plan to promote the CBDC usability test held on the afternoon of the 4th at the Bank of Korea Integrated Annex in Jung-gu, Seoul. Photo by Joint Press Corps
Deputy Governor Yoo first addressed the recent fundamental changes occurring in the financial system ecosystem. He said, "Big tech companies are actively entering the financial industry, and fintech firms such as neobanks are rapidly growing," adding, "Banks are also focusing their capabilities on digital transformation to survive." In a situation where traditional business foundations have weakened, banks are seeking to secure future growth engines by pioneering new markets through digital transformation and offering customized products to consumers. Banks are forming partnerships with big tech and fintech companies or participating directly in investments and acquisitions. Technologies such as artificial intelligence (AI), cloud computing, and big data are also being actively utilized. Digital innovation enhances financial productivity and accessibility, thereby including financially marginalized groups.
However, concerns about risks remain. Deputy Governor Yoo pointed out, "With digital financial innovation, financial tasks are being fragmented and recombined, leading to the emergence of new service operations and the synthesis of services that can evade regulations," adding, "This creates regulatory blind spots and is accompanied by new risks such as data security and personal information breaches."
He emphasized that while appropriate digital financial regulatory frameworks are being designed from the perspectives of financial stability, data security, and consumer protection, it is important to maintain a balance so that regulations do not hinder innovation. In particular, attention must be paid to side effects caused by regulatory gaps between traditional financial industries and non-financial sectors. The ripple effects caused by cross-border regulatory gaps should also be carefully analyzed.
South Korea became the second country after the European Union (EU) to enact a basic AI law, which is scheduled to take effect in January next year. He explained, "As digital transformation accelerates, innovation using AI in the financial sector is expected, but there are also concerns that risks may increase due to personal information leaks, vulnerabilities to cyberattacks, concentration of market dominance, and loss of trust caused by lack of accountability," adding, "A transparent regulatory system will promote the sound development of AI while laying the foundation for ensuring AI operational ethics and reliability, thereby improving the quality of life for the public."
He stressed, "The risks brought by digital innovation cannot be addressed by any single country alone," and added, "We must gather everyone's wisdom and prepare together." He noted, "Recently, the Bank for International Settlements (BIS) and central banks of various countries jointly established a Cyber Resilience Cooperation Center to share the latest cyber incident cases and trends from each country," adding, "Joint cyber drills conducted since 2019 and the AI Global Partnership, a global multilateral government forum that started with the G7, can serve as good benchmarks."
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