Generative AI risk framework for financial sector in the works: MAS

THE Monetary Authority of Singapore (MAS) on Wednesday (Nov 15) announced that a risk framework for using generative artificial intelligence (genAI) in the financial sector has completed its first phase of development.

The framework, developed under an initiative dubbed Project MindForge, aims to enable financial institutions to use genAI in a responsible manner to solve common industry-wide challenges and enhance risk management.

A white paper on the framework will be released in January next year, said MAS.

The project is supported by a consortium comprising DBS, OCBC, UOB, Standard Chartered Bank, Citi Singapore, HSBC, Google Cloud, Microsoft, MAS, Accenture and the Association of Banks in Singapore.

During its first phase, the developed framework identified seven risk dimensions in areas such as accountability and governance, monitoring and stability, and legal and regulatory, said MAS.

The consortium will look into the application of AI technology within the industry, such as using genAI to manage compliance tasks and identify hidden financial risks.

The scope of the project will also expand to involve the insurance and asset management industries, before being extended to the entire financial sector.

The use of genAI will also be explored in areas such as anti-money laundering, sustainability and cybersecurity.

MAS chief fintech officer Sopnendu Mohanty said: “MindForge aims to address common challenges and catalyse AI-powered innovation in the financial industry, while ensuring that this technology is used in a responsible and sustainable manner.”

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The initiative was first announced by Deputy Prime Minister Heng Swee Keat in June this year.