"AI transformation at financial firms requires not only expertise in AI cloud technology but also industry-specific knowledge. LG CNS has leading capabilities in this area."
Cho Sung-woo, Vice President of Financial AX1 Business at LG CNS, made these remarks during a recent meeting with The Seoul Economic Daily at the company's headquarters in Magok, Seoul, addressing AI transformation (AX) at financial institutions. Banks, credit card companies, and other financial firms have recently issued a series of AX-related tender notices. Their judgment is that financial companies cannot be exceptions in leveraging AI to boost work productivity and efficiency, and to transform customer touchpoints with new services.
Currently, the most aggressive pursuers of AX are financial holding companies, led by banks. "The areas where AI is driving innovation in banks are largely customer experience and employee productivity, and recently the mood is to focus first on productivity innovation," Cho said. "Since finance is a number-based service, even a very low level of hallucination can become a problem."
Cho cited fraud detection as a business area where AI is expected to have a strong impact. "While conventional fraud detection only filtered out transactions matching preset conditions, AI agents can detect unusual transactions or suspicious activities even when not predefined," he said. "Another characteristic is that AI continues to operate even while people are resting."
Such AX in the financial sector is characterized by being carried out within the scope of compliance with network separation regulations. This is to prevent hacking and information leaks and to protect financial data. This is also why systems integration (SI) companies build AX projects for financial firms in an on-premises manner. On-premises refers to installing and operating AI systems and software on the company's internal servers or data centers, rather than on external clouds. "Even after building in an on-premises manner, AI models continue to evolve, so continuous upgrades are necessary," he added. "Substantial investment also follows."
In addition, for financial firms' AX to deliver results, the unique characteristics and expertise of each industry segment must be precisely reflected in AI systems. Work to convert internal regulations, product descriptions, customer consultation records, research materials, and various manuals into structured databases that AI can read and understand must come first. "In the financial sector, explainable AI and Human in the Loop are important," Cho explained. "You must be able to explain to customers why AI produced such a result, and you must also leave evidence of the moment AI made its judgment."
LG CNS is currently focusing on next-generation computing network construction projects alongside financial sector AX projects. Most banks have been using Unix as their main computing system for 15 to 20 years. As operating periods lengthen, technical support is decreasing, and securing developers who can handle C language, the system's foundational language, is also becoming difficult. Accordingly, banks are expected to place orders for Linux migration worth approximately 2 trillion won over the next one to two years.
"Since April last year, we have carried out the 130 billion won next-generation system construction project for Mirae Asset Life Insurance by combining AI and cloud technologies, and we have successfully executed projects for Shinhan Bank, Shinhan Card, Mirae Asset Securities, and KB Securities," Cho emphasized. "We take pride in having the highest capabilities to manage and operate projects."
