MAS to Leverage AI to Assess Financial Risks

On Nov 15, the Monetary Authority of Singapore (MAS) announced the completion of phase one of Project MindForge. The project aims to create a risk framework for the application of Generative Artificial Intelligence (GenAI) in the financial industry. In a statement, MAS announced that a whitepaper outlining the risk framework will be released in January 2024.

The executive summary of this whitepaper was released on Nov 15, as per the statement. According to MAS, GenAI is a quickly advancing technology that has the potential to completely change and also cause upheaval in the financial industry.

GenAI can assist financial institutions in enhancing efficiency, delivering customized customer experiences, and creating innovative content and ideas for products and services. However, it also acknowledges the potential risks, such as advanced cybercrime methods, copyright infringement, data hazards, and biases.

The goal is to create a clear and concise framework for the responsible use of GenAI in the financial industry and to drive the use of GenAI-powered innovation to address industry challenges and improve risk management. The project has backing from a consortium including DBS Bank, OCBC Bank, United Overseas Bank Limited, Standard Chartered Bank, Citi Singapore, HSBC, Google Cloud, Microsoft, MAS, Accenture, and the Association of Banks in Singapore.

During the first phase, the consortium created a thorough GenAI risk framework that includes seven dimensions of risk in the following categories: (a) accountability and governance, (b) monitoring and stability, (c) transparency and explainability, (d) fairness and bias, (e) legal and regulatory, (f) ethics and impact, and (g) cyber and data security.