The Monetary Authority of Singapore (MAS) has launched the Pathfinder program, or PathFin.ai, to support financial institutions (FIs) to adopt artificial intelligence (AI).
MAS’s managing director Chia Der Jiun said in MAS Annual Report 2024/2025 media conference on Tuesday that this program is a collaborative initiative with the industry, where FIs share with one another their knowledge and experiences in successfully implementing AI use-cases.
By curating a library of use-cases, industry-validated solutions and best practices among these FIs, he noted the program seeks to reduce the time and effort to search, select and effectively implement AI solutions.
According to him, the program also partners with established training providers to provide skills training that is aligned with the AI solutions chosen by FIs.
It is noted today, 20 FIs covering banking, insurance, capital markets and payments have been onboarded to the Pathfinder program.
Meanwhile, Chia said AI adoption in the financial services industry globally is expanding rapidly.
“AI has been applied as internal productivity tools, to automate back-office processes and software development, augment customer relationship management and advisory services, and assist in risk management and screening of suspicious transactions,
“AI will increasingly be a competitive differentiator between FIs and financial centers,” he noted.
He said MAS’s aim is for Singapore’s FIs and workforce to be positioned well to adopt and use AI, so that they are competitive, here and internationally.
He said MAS is also working on multiple fronts to strengthen the AI capabilities of Singapore’s financial sector and our workforce.
Other than launching Pathfinder program, MAS is also anchoring AI competencies of FIs in Singapore.
According to Chia, more than 30 FIs have established AI functions in Singapore to work on AI-related projects.
Among them, several serve as Global AI Competency Centers.
Beyond building specific use-cases to drive value creation, a number of these FIs are incubating and implementing AI solutions in Singapore before scaling deployment to other markets.
“We welcome more FIs to build AI capabilities in Singapore and join the growing community of AI practitioners within our financial sector,” said Chia.
As FIs increase the scale and scope of AI adoption, Chia opined that they also need to step up governance and risk management practices for the responsible use of AI.
“MAS is developing supervisory guidance to FIs, focusing on key risks associated with AI use,” he said.
For him, there are key risks around model, data, technology, and third-party risks.
“Poor management of these risks can result in wrong or even harmful information used in internal decision-making or advice given to customers and investors,” he explained.
He highlighted that last year, MAS conducted a thematic review of AI use in key banks and found varying levels of maturity in AI risk management.
It published an information paper sharing its observations from the review and good practices on AI model risk management.
“To clarify our supervisory expectations and foster robust practices in the industry, we are developing a set of supervisory guidelines on AI risk management,
“This is intended to address the governance and controls around the development and deployment of AI in FIs, covering pertinent issues such as evaluation, testing and explainability,” he said.
For example, in MAS thematic review, it observed a range of practices on AI risk materiality assessment and how to evaluate and test AI during development.
The regulator’s supervisory guidelines will also highlight key risk dimensions that should be covered during AI risk materiality assessments, and key areas to evaluate and test during AI development.
“In parallel, we are working through the MindForge consortium on an AI governance handbook that will serve as a companion and good practice guide for FIs implementing the upcoming supervisory guidelines,” said Chia.
For example, it would discuss approaches for managing third-party AI risks that are highlighted in MAS’ guidelines.
According to him, the consultation on MAS’ supervisory guidelines and the MindForge handbook will also be published towards the end of this year.
MAS will also upskill the financial sector workforce so that they can do more with AI assistance, Chia said.
It is noted that this year, MAS and the Institute of Banking and Finance Singapore (IBF) are stepping up efforts to identify and prepare relevant courses to uplift the generative AI (GenAI) proficiencies of financial sector professionals.
The Institute of Banking and Finance (IBF) is also collaborating with nine FIs to pilot how AI can augment and transform eight existing job roles.
According to Chia, insights from this pilot will help guide both the industry and IBF in planning for workforce transformation in the years ahead and to meet the upskilling and reskilling needs of the financial sector workforce.
“Through these four initiatives, we will support FIs and the workforce in the AI adoption journey so that AI solutions are developed and deployed safely and responsibly, and the workforce is provided with the skills to perform job roles transformed by AI,” he concluded.
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