[2025 Financial Forum] Financial Services Commission Director Ahn Changguk: "Regulations Should Not Hinder Innovation in New Growth Industries"

2025 Seoul Asia Financial Forum Held
"The Role of Finance in an Era of Low Growth and Low Birth Rates"
Special Lecture by Ahn Changguk, Director of the Financial Industry Bureau at the Financial Services Commission

Ahn Changguk, Director of the Financial Industry Bureau at the Financial Services Commission, attended the '2025 Asia Financial Forum' hosted by Asia Economy at the Chosun Hotel in Jung-gu, Seoul on the 21st. He gave a special lecture on the topic of 'Sustainable Development Directions of the Korean Financial Industry, including Banking and Insurance.' May 21, 2025. Photo by Kang Jinhyung

"When introducing new regulations, we must thoroughly examine the 'side effects' on the entire industry and consider ways to avoid hindering innovation within the industrial ecosystem."

Ahn Changguk, Director of the Financial Industry Bureau at the Financial Services Commission, stated this during a special lecture on the role of finance in an era of low growth and low birth rates at the '2025 Asia Financial Forum' held at the Westin Chosun Seoul in Jung-gu, Seoul on the 21st.

Director Ahn emphasized the need to fundamentally reconsider both regulatory innovation and the approach to introducing regulations in order to overcome the era of low growth and low birth rates. He cited the UK's 'Red Flag Act' as an example, pointing out that regulatory innovation can determine a country's competitiveness.

The 'Red Flag Act' is a frequently cited case when discussing regulatory innovation. The United Kingdom was the first to develop the automobile engine. However, in order to protect the horse-drawn carriage industry and the jobs of coachmen, the law limited the maximum speed of automobiles to between 3.2 km/h and 6.4 km/h, and required that a horse-drawn carriage carrying a red flag precede any automobile in operation.

Director Ahn said, "Due to the 'Red Flag' law, leadership in the automobile industry shifted to the United States and Germany," adding, "The United Kingdom, which had continued innovation since the Industrial Revolution, lost its position in the global economy due to the side effects of regulation."

He stressed, "We must break away from outdated regulations and proactively introduce innovative services," and added, "The difference in innovation between Europe and the United States is also influenced by the impact of regulation."

Ahn Changguk, Director of the Financial Industry Bureau at the Financial Services Commission, attended the '2025 Asia Financial Forum' hosted by Asia Economy at the Chosun Hotel in Jung-gu, Seoul on the 21st. He gave a special lecture on the topic of 'Sustainable Development Directions of the Korean Financial Industry, including Banking and Insurance.' May 21, 2025. Photo by Kang Jinhyung

Director Ahn also stated that it is necessary to consider the method of introducing regulations. Regulations can largely be divided into principle-based and rule-based approaches. He explained, "Principle-based regulation involves setting broad principles and is mostly adopted in Europe, while rule-based regulation, as in our country, involves listing each regulation individually." He added, "We need to consider which approach fosters innovation in new growth industries."

He also noted that, given the intensifying competition among countries in advanced industries such as semiconductors, artificial intelligence (AI), and aerospace, it is important to consider both positive regulation (enumerative regulation) and negative regulation (inclusive regulation) approaches.

Positive regulation is a method in which laws and policies specify what is permitted, and everything else is regulated. In contrast, negative regulation allows everything except what is explicitly prohibited by laws and policies. Countries with civil law systems, including ours, mainly adopt positive regulation.

Director Ahn explained, "With regard to data regulation, Europe and the United States have different approaches. Europe implements regulations that are based on the principle of requiring consent, while in the United States, anything is permitted unless an individual objects."

He continued, "The differences in the AI ecosystems of Europe and the United States are related to differences in regulatory innovation," and added, "We can refer to the experiences of other countries when deciding which regulations to adopt in new industries."

Director Ahn emphasized that finance should support the advanced industrial ecosystem based on regulatory innovation. He said, "Finance and fiscal policy should move toward investing together in new growth areas such as AI," and added, "Finance should foster innovative companies in new growth sectors, and the capital generated from these companies should create a virtuous cycle that strengthens the industrial ecosystem."