The Monetary Authority of Singapore (MAS) has initiated a collaborative effort with banks and technology firms to develop a generative AI risk framework and explore its application in the financial services sector. This initiative, known as Project MindForge, was launched earlier this year to investigate the impact of generative AI on the financial services industry.
In the first phase of the project, the participating consortium, which includes DBS, OCBC, United Overseas Bank, Standard Chartered, Citi Singapore, HSBC, Google Cloud, Microsoft, and Accenture, has developed a white paper outlining a comprehensive risk framework. The framework addresses challenges related to sophisticated cybercrime tactics, copyright infringement, data risk, and biases.
Seven risk dimensions were identified, covering areas such as accountability and governance, monitoring and stability, transparency and explainability, fairness and bias, legal and regulatory considerations, ethics and impact, as well as cyber and data security. Additionally, a platform-agnostic reference architecture for generative AI (GenAI) was created, offering a set of building blocks and components for organizations to establish robust enterprise-level technology capabilities.
The consortium is now progressing to explore various use cases, including applications for complex compliance tasks and the identification of hidden interconnected financial risks. The project will also involve the participation of insurance and asset management firms.
Sopnendu Mohanty, Chief Fintech Officer at MAS, emphasized the importance of developing a clear and concise framework for the responsible application of generative AI in the financial industry. He stated, “MindForge aims to address common challenges and catalyze AI-powered innovation in the financial industry while ensuring that this technology is used in a responsible and sustainable manner.”
Recent research from the Gilmore Centre for Financial Technology indicates that 93% of senior decision-makers at financial institutions believe the UK Government should implement stricter regulations for generative AI. Furthermore, 77% express dissatisfaction with the Prime Minister’s approach to generative AI, and 85% admit concerns about the security risks associated with this technology.