The Monetary Authority of Singapore (MAS) on Wednesday issued a set of Guidelines on Artificial Intelligence (AI) Risk Management to support responsible AI adoption in Singapore’s financial sector.
The guidelines set out clear supervisory expectations for financial institutions (FIs) to manage risks arising from AI use, while allowing them to tailor their approaches according to their risk profiles, including the scale and nature of their AI use, the MAS said in a statement.
AI technologies are developing rapidly, and being adopted in financial services with increasing scale and sophistication. This includes AI models and systems with greater autonomy in generating outputs, decision making, or execution.
Financial regulators and international bodies are correspondingly highlighting the need to manage AI risks effectively while enabling firms to realise the benefits of adoption. Following MAS’ consultation on the guidelines in November 2025, the Financial Stability Board has also consulted on sound practices for FIs’ responsible adoption of AI.
According to the statement, FIs are expected to manage AI risks at both the enterprise and individual use case levels, and build the capabilities needed for responsible AI use as adoption grows.
MAS’ guidelines provide a comprehensive framework for AI risk management across the financial sector. They apply to all FIs and all forms of AI technologies, while allowing each FI to assess how best to meet MAS’ supervisory expectations based on the nature and scale of its AI use, and the associated risk materiality.
Respondents to the November 2025 public consultation had expressed strong support for the principles-based and risk-proportionate approach. They also sought clarity on whether FIs could use existing governance structures, how they should manage risks from embedded AI, and when basic AI governance policies and procedures would be sufficient.
MAS said it has retained the key expectations in the consulted guidelines and refined them to address this feedback. The key expectations are for FIs to:
- Strengthen oversight of AI risks with clear accountabilities
- Identify, assess and manage AI risks across the AI life cycle
- Manage the risks from third-party AI use
- Apply the guidelines in a risk-proportionate manner
According to MAS, the guidelines will take effect on Oct 7, 2027. FIs may implement the guidelines in phases: they should meet the expectations set out in Sections 3 to 4 from Oct 7, 2027, and Sections 5 and 6 by Oct 7, 2028.
“AI has significant potential to improve financial services, from enhancing customer outcomes and strengthening risk management to improving productivity and enabling new products and services,” said MAS Deputy Managing Director Ho Hern Shin.
“Realizing these benefits sustainably requires financial institutions to understand and manage the risks that come with increasingly capable AI systems. With greater regulatory clarity on financial institutions’ AI usage, FIs can innovate with confidence, while maintaining the trust of customers and the resilience of Singapore’s financial system,” she added.