(Singapore Aug 3, 2023) The risk of herding in trading platforms arising from the use of AI models is currently assessed to be low as FIs in Singapore are still at a nascent stage of using AI models for decision-making, Singapore’s Deputy Prime Minister Lawrence Wong has said.
He said it in a written reply to a parliamentary question on impact of artificial intelligence on trading platforms in financial markets.
“MAS requires regulated financial institutions (FIs) to have controls in place to avoid or mitigate conflicts between their interests and those of their customers. This approach is technology-neutral and is applied across all regulated Fis,” said the DPM, who is also Chairman of MAS.
He said as early as 2018, MAS introduced the Principles to Promote Fairness, Ethics, Accountability and Transparency (FEAT Principles) to guide FIs’ responsible use of Artificial Intelligence and Data Analytics (AIDA) in their products and services.
Amongst other things, these principles require FIs to ensure that AIDA adoption does not result in customers being treated less fairly than the business. FIs are also required to provide customers transparent disclosures on the FI’s products and services, to facilitate informed decision making.
“Nevertheless, MAS continues to carefully monitor and assess the risks brought about by AI in financial markets,” he said.
In recent years, MAS has worked with the industry to develop a framework which enables FIs to evaluate their AI systems against the FEAT Principles. MAS will continue to engage the industry on the responsible use of AI in finance.
