MAS brings together banks and tech firms to create a generative AI risk framework

The Monetary Authority of Singapore (MAS) brought together a number of banks and technology companies in order to create a generative AI risk framework. The regulator now aims to explore ways of using this technology in the financial services sector.

MAS sees great potential in Generative AI

MAS’ initial engagement with generative AI technology came earlier in 2023 when it embarked on Project MindForge. The project focused on investigating generative AI in an attempt to determine how it might impact the financial services sector.

The project started its first phase by creating a white paper that details a risk framework that sought to navigate different scenarios, such as the possibility of developing more sophisticated cybercrime tactics, data risk and biases, copyright infringement, and the like.

The initiative was greeted by a number of banks and technology firms, including the likes of Google Cloud, Accenture, Microsoft, Standard Chartered, Citi Singapore, HSBC, DBS, United Overseas Bank, and OCBC. Apart from supporting the project, these entities also contributed to the development of a framework meant to ensure the responsible use of Generative AI.

The initiative resulted in the identification of seven risk dimensions that were found in areas of accountability and governance, transparency and explainability, monitoring and stability, legal and regulatory, fairness and bias, ethics and impact, as well as data and cyber security.

Taking the next step

Following this, the initiative also created a platform-agnostic Generative AI reference architecture, which created a list of components and general building blocks that would allow organizations to create robust enterprise-level tech capabilities. Now, however, the consortium is starting to create specific use cases for this technology, including those for more complex tasks in the compliance sector.

In addition, they are working on use cases that would see this technology as a method of identifying hidden and interconnected financial risks. The next step in an attempt to reach this goal is to introduce new companies from the insurance and asset management sectors into the project and use their contributions to achieve this.

The chief fintech officer at the Monetary Authority of Singapore, Sopnendu Mohanty, commented on the development, stating that the financial industry continues to see potential in Generative AI technology. As a consequence, it is more interested than ever in exploring that potential. However, this also makes it crucially important to come up with a clear, concise framework in order to ensure responsible application.

Mohanty added that MindForge intends to address some of the most common challenges and catalyse AI-powered innovation in the financial industry. At the same time, it must ensure that said technology is used responsibly, and in a sustainable manner.