The Monetary Authority of Singapore (MAS) has released a consultation paper proposing new guidelines for artificial intelligence (AI) risk management within the financial sector. These guidelines aim to ensure the responsible use of AI by financial institutions (FIs) and cover oversight, risk management systems, and AI life cycle controls.
The guidelines are designed to apply to all FIs and set out MAS’s supervisory expectations. They emphasise the importance of board and senior management in governing AI risk management, including establishing frameworks and fostering a risk-aware culture. The guidelines also require FIs to maintain accurate AI inventories and conduct risk materiality assessments.
MAS recognises the diverse applications of AI and the varying risks associated with different use cases. The guidelines are intended to be proportionate, taking into account the size, nature, and risk profiles of FIs’ activities. They cover a range of AI technologies, including Generative AI and AI agents.
Key areas of focus include data management, fairness, transparency, human oversight, and third-party risks. FIs are expected to implement robust controls throughout the AI lifecycle, ensuring their capabilities and capacities align with their AI usage.
Deputy Managing Director Ho Hern Shin stated, “The proposed Guidelines on AI Risk Management provide financial institutions with clear supervisory expectations to support them in leveraging AI in their operations.” The guidelines are based on MAS’s 2024 review of key banks’ AI use and discussions with FIs.
The consultation paper is available on the MAS website, and interested parties are invited to submit comments by 31 January 2026.
