The MAS proposes guidelines to enhance management of AI risks and to be applied in a proportionate manner by Financial Institutions (FI). The scope of AI includes AI based on machine learning, deep learning, reinforcement learning techniques, as well as Generative AI, AI agents and any newer AI technologies.
FIs should institute basic policies for the use of AI commensurate with the FI’s level of AI adoption. These policies should address who is responsible for overseeing AI use, guidelines on allowed and disallowed uses of AI, as well as the communication, checks and reviews of such guidelines. The proposed implementation is 12 months after the guidelines are issued.
The guidelines proposed the following:
- Board and Senior Management Responsibilities
- Implement frameworks, structures, policies and processes to identify and inventorise the use of AI.Assess risk materiality and manage risks of AI throughout its lifecycle.
- Where the overall AI risk exposure of an FI is deemed material, establish a dedicated cross-functional committee for oversight and address potential gaps.
- Systems, Policies and Procedures
- Identify where AI is used – Identification process to have clear definitions, criteria and processes, supported by robust systems.
- AI inventory – Establish and maintain an accurate and up-to-date inventory of AI use cases, systems or models.
- Risk materiality assessment – Implement an appropriate assessment methodology to evaluate the risk materiality of AI use cases, systems, or models. Minimally cover the key dimensions of impact, complexity and reliance.
- AI Lifecycle Controls
- Plan for and implement robust controls covering the entire AI life cycle.
- Key areas to assess for relevance include data management, fairness, transparency and explainability, human oversight, management of third-party AI risks, selection of AI, evaluation and testing, technology and cybersecurity, reproducibility and auditability, reviews, monitoring and change management.
For the full details, refer to https://www.mas.gov.sg/publications/consultations/2025/consultation-paper-on-guidelines-on-artificial-intelligence-risk-management
Disclaimer: The information, views or opinions expressed are provided for general information and should not be relied upon as legal or professional advice.