The Monetary Authority of Singapore (MAS) has on Wednesday announced the successful conclusion of phase one of Project MindForge which seeks to develop a risk framework for the use of Generative Artificial Intelligence (GenAI) for the financial sector.
MAS said in a statement that a whitepaper detailing the risk framework will be published in January 2024.
MAS said GenAI is a rapidly evolving technology that could both transform and disrupt the financial sector.
While GenAI can help financial institutions to improve efficiency, provide more personalized customer experiences, and generate content and ideas for products and services, it said there are also risks involved, including more sophisticated cybercrime tactics, copyright infringement, data risk and biases.
It said project MindForge looks into the risks and opportunities of GenAI for the financial sector.
It also said the project is supported by a consortium comprising DBS Bank, OCBC Bank, United Overseas Bank Limited, Standard Chartered Bank, Citi Singapore, HSBC, Google Cloud, Microsoft, MAS, Accenture, and the Association of Banks in Singapore.
In phase one, it said the consortium has developed a comprehensive GenAI risk framework, with seven risk dimensions identified in the areas of: (a) accountability and governance, (b) monitoring and stability, (c) transparency and explainability, (d) fairness and bias, (e) legal and regulatory, (f) ethics and impact, and (g) cyber and data security.
It said the framework will enable financial institutions to use GenAI in a responsible manner.
According to the statement, the consortium will also look into developing strong industry use cases that will benefit from the application of GenAI and other AI technologies, including the use of GenAI in managing complex compliance tasks and identifying hidden, interconnected financial risks.
In the next phase, it said the MindForge consortium will expand its scope to involve financial institutions from the insurance and asset management industries.
It said the GenAI risk framework can thus be further improved and extended to the entire financial industry.
It also said the consortium will conduct experiments to explore the use of GenAI in areas such as anti-money laundering, sustainability, and cyber security.
“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,” said Sopnendu Mohanty, Chief FinTech Officer, MAS.
“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,
“We believe that Project MindForge will contribute to the continued evolution of the financial industry and its responsible adoption of AI,” he added.