NH NongHyup Financial Holdings has begun building a groupwide artificial intelligence (AI) management framework, stepping up its response to moves in the financial sector to strengthen AI internal controls.

NongHyup Financial Holdings said on May 13 it held a kickoff briefing on establishing AI governance at its headquarters in Jung-gu, Seoul, on May 12 and began work to overhaul the group’s AI operating framework.

After the AI Basic Act took effect in January, the Financial Services Commission is working to prepare guidelines that include standards for AI use in finance and directions for internal controls. To respond proactively to those institutional changes, it has moved to build AI governance at the group level.

Over about 8 months, NongHyup Financial plans to set groupwide common standards and operating principles and then carry out work to embed them across major affiliates including banking, insurance, securities, capital and savings bank units. It aims to complete an AI management framework tailored to NongHyup Financial based on that work.

It also plans to run a groupwide collaboration system involving relevant departments such as organisational management and risk, internal controls, information security and IT, and to comprehensively overhaul AI-related internal rules and frameworks. It said it will also strengthen links with existing internal control systems to build a framework that can operate in actual work settings.

The meeting also reviewed the need to set AI use standards that reflect the external regulatory environment and the characteristics of the financial industry, along with a phased implementation strategy and detailed tasks.

An NH NongHyup Financial official said, "AI governance is the foundation that supports stable use of AI," adding, "We will focus on creating a balanced framework that can secure innovation and trust together."