The Monetary Authority of Singapore has brought together banks and tech firms to develop a generative AI risk framework and is now exploring how the technology can be used in the financial services sector.
Earlier this year, MAS embarked on Project MindForge to investigate generative AI and how it will impact the FS sector.
The project's first phase is a white paper detailing a risk framework that seeks to navigate things like the possibility of more sophisticated cybercrime tactics, copyright infringement, data risk and biases.
DBS , OCBC, United Overseas Bank, Standard Chartered, Citi Singapore, HSBC, Google Cloud, Microsoft and Accenture are all supporting the project, developing the framework on order to ensure GenAI can be used responsibly.
In total, seven risk dimensions were identified in the areas of accountability and governance; monitoring and stability; transparency and explainability; fairness and bias; legal and regulatory; ethics and impact; and cyber and data security.
A platform-agnostic GenAI reference architecture was also developed, providing a list of the building blocks and components that organisations can use to create robust enterprise-level technology capabilities.
The consortium is now moving onto use cases, including for complex compliance tasks and identifying hidden, interconnected financial risks. Insurance and asset management firms will also be brought into the project.
Sopnendu Mohanty, chief fintech officer, MAS, says: "As the financial industry continues to explore the potential of Generative AI technology, it is crucial that we develop a clear and concise framework for its responsible application.
"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."
New research from the Gilmore Centre for Financial Technology finds that 93 per cent of senior decision makers at financial institutions believe the UK Government should introduce stricter regulations for Generative AI.
More than three-quarters (77 per cent) say they are not happy with the Prime Minister’s approach to Gen AI, and 85 per cent have admitted to worrying about the security risks posed by Gen AI.
The development of the AI Framework is just one of a series of initiative unveiled by Singapore's central bank at the island state's annual fintech festival.
MAS has additionally outlined plans for the live issuance of a wholesale CBDC for interbank setttlement next year. The first pilot will involve the use of “live” wholesale CBDC to settle retail payments between commercial banks. Future pilots could include the use of “live” wholesale CBDC for the settlement of cross-border securities trade.
Operating under the Project Orchid umbrella, MAS is also set oversee four new pilot trials for digital money with a host of banks and technology partners.
Other initiative underway include the launch of a local ESG hub to simplify how the financial sector and real economy collect, access and act upon sustainability data. This is being butressed by a cross-border platform under a new entity Greenprint Technologies, which will be supported by HSBC, KPMG in Singapore, MAS, Microsoft and MUFG Bank as strategic partners.