Artificial intelligence (AI) has been seen as a double-edged sword for virtually all industries. This includes the financial services industry, prompting the Monetary Authority of Singapore (MAS) to develop guidance, governing responsible use of AI and data analytics.
AI remains a divisive force given its limitless potential and departure from traditional mechanisms or the status quo. While many see this technology as the future, others see cause for concern. Given the potential for ethics breaches or any future abuse, MAS is working with key industry stakeholders to roll out a guide to help clarify the use of AI.
A more unified guide will look to police and lay out both the responsible and ethical use of AI and data analytics by financial institutions. This technology already made its mark on the financial industry, though newer variations of AI could dramatically reshape the industry as we know it in a blink of an eye.
MAS is targeting the release of its comprehensive guide for the end of the year, which will eventually grow to cover all segments of the financial industry, including fintech. Such a roadmap would be instrumental for many venues, given the lack of clarity surrounding this area and the deployment of such quickly advancing technologies.
First and foremost, the guide will look to set out and establish key principles and best practices for the use of AI and data analytics. Big data is a huge area of research and development for venues, with advances helping govern algo trading strategies and new techniques. Given the extent to which venues are leaning on this technology, the need to lay out unified principles is paramount.
Curbing potential abuse
David Hardoon, Chief Data Officer of MAS and co-chair of the upcoming committee, commented, “AI and data analytics have huge potential to transform the financial industry for the better. But these technologies can also potentially be misused. MAS looks forward to working with the industry to encourage innovative uses of these technologies while putting in place the right conditions for their ethical use based on the principles of fairness, accountability, and good governance.”
The guide will, therefore, be key in helping strengthen internal governance while also looking to reduce risks of data misuse. Newer technology of this nature, especially ones with such potential have always raised concerns amongst regulators, with MAS being no exception. Blockchain technology’s slow, if not gradual adoption across the financial sector is testament to this trend.
Subsequently, MAS brought together a group of thought leaders and practitioners across data analytics in the financial sector to develop the guide. The full list of members of the Fairness, Ethics, Accountability, and Transparency (FEAT) Committee includes the following individuals:
- David Hardoon (Co-Chair), Chief Data Officer, MAS
- Hsieh Fu Hua (Co-Chair), Co-Founder and Advisor, PrimePartners
- V K Rajah (Special Advisor), Senior Counsel and Member of Singapore Group Practice
- Teo Swee Lian (Advisor), Non-executive Independent Director, SingTel
- Raymond Au, Chief Data Scientist and Head of Asia Lab, Allianz
- Paul Cobban, Chief Data & Transformation Officer, DBS
- Shameek Kundu, Chief Data Officer, Standard Chartered Bank
- Richard Lowe, Chief Data Officer, UOB
- Donald MacDonald, Head of Group Customer Analytics & Decisioning, OCBC Bank
- Kelvin Tan, Head of FinTech & Data, SGX
To help accomplish this feat, MAS over the next few months, will be engaging representatives and officials from across the industry to obtain views and feedback on the proposed guide in Q2 2018. Additionally, MAS is also working with the Infocomm Media Development Authority to coordinate a more concrete understanding of AI governance across all sectors.
“The guide would be very useful for the financial industry. As the industry increasingly adopts AI and data analytics to serve their customers, they must also play their part to ensure that these technologies are used in a responsible manner,” explained Hsieh Fu Hua, former chairman of UOB group, and co-chair of the FEAT committee.