AS MORE companies seek to use artificial intelligence (AI) in their operations, a consortium led by the Monetary Authority of Singapore (MAS) released an open-source toolkit on Monday (Jun 26) to enable its responsible use in the financial industry.

The Veritas Toolkit version 2.0 builds on an earlier version of this software released in February 2022. The original version had focused on the assessment methodology of fairness, but this updated version improves on that methodology, and also includes assessment methodologies for ethics, accountability and transparency.

The consortium also published a White Paper detailing the key lessons learnt by seven financial institutions which tested the toolkit; they included the trio of local banks and insurer Singapore Life.

Companies such as Google have also developed additional use cases in which the Veritas methodology can be applied. For instance, it used the assessment methodologies on the soundness of Google Pay’s detection of fraudulent payments in India, and later shared its experience in mapping AI principles, processes and practices against the methodologies.

The MAS-led consortium that developed the toolkit comprises 31 industry players, including consultancy Accenture and Bank of China, the main developers of the toolkit.

MAS said it worked with AI solution providers such as IBM and SAS to integrate the toolkit so that it can better serve financial-sector customers.

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“The consortium will work closely with these industry players to build the Veritas open-source developer community, and train more responsible AI talents,” MAS said.

Framework for designing networks for digital assets

The regulator also published a report proposing a framework for designing open, interoperable networks for digital assets, that is, tokenised real-economy and financial assets.

The report, titled Enabling Open & Interoperable Networks, was jointly developed with subject-matter experts at the Bank for International Settlements’ Committee on Payments and Market Infrastructure, with contributions from participating financial institutions.

“The report is part of MAS’ effort to ensure that emerging digital-asset networks are underpinned by international standards which promote safe and efficient financial market infrastructure,” MAS said, adding that the report took reference from industry pilots launched under Project Guardian.

Project Guardian is MAS’ collaboration with the financial industry to test the feasibility of applications in asset tokenisation and decentralised finance. The project will be expanded to test asset tokenisation’s uses across more financial asset classes.

As part of the Project Guardian Industry Group, 11 financial institutions will lead industry pilots in asset and wealth management, fixed income and foreign exchange.

For instance, Standard Chartered will work with Chinese supply-chain finance technology solutions provider Linklogis to develop an initial token offering platform to enable the issuance of asset-backed security tokens listed on the Singapore Exchange.

An initial pilot had shown that it was possible to give investors access to yield-generating tokens tied to cash flows from underlying trade finance and working capital loans with asset-backed tokenisation.

Standard Chartered global head of trade and working capital Kai Fehr said the initial pilot trade proves the viability of asset-backed tokenisation as an “innovative originate-to-distribute” structure.

He said: “We are eager to build on our learnings and take the next steps towards operationalising this innovation at scale, where we will focus on expanding the scope to include a wider range of asset classes, identifying additional partners and developing guardrails that ensure investor protection.”

On a separate note, MAS welcomed the Japan Financial Services Agency as the first overseas financial regulator to join Project Guardian.

MAS deputy managing director of markets and development Leong Sing Chiong said: “As we enter this new phase of Project Guardian, we look forward to collaborating with fellow policymakers and industry practitioners to jointly develop effective frameworks to guide the sound development of future financial networks.”