Singapore’s central bank and financial regulator has proposed artificial intelligence risk management guidelines for financial institutions.
The move comes as the city state accelerates adoption and development of AI in the financial industry and across the country.
The Monetary Authority of Singapore (MAS) released a consultation paper on the proposed rules last week. It sets out expectations on oversight of AI risk management in financial institutions; key AI risk management systems, policies and procedures; and key AI life cycle controls, capabilities and capacity needed for use of the technology.
“The growing adoption of AI portends significant transformation in financial services,” Chia Der Jiun, managing director of MAS, said in a speech at the Singapore Fintech Festival 2025 on November 13, when the paper was published on the regulator’s website.
He said the aim is for financial institutions to adopt AI productively and safely, and for the workforce to have the skills to use the technology.
“In fact, one of the key factors determining the pace of AI use, and the extent of AI autonomy permitted in work processes, is the robustness of guardrails and controls over the AI life cycle,” Chia said, adding that financial institutions “have told us that they would like more regulatory clarity”.
According to Chia, the proposed guidelines are “principle-based rather than prescriptive”, so as not to run ahead of innovation. “It sets up flexible guardrails to enable responsible innovation in a fast-moving space.”
The consultation period on the proposals ends on January 31, 2026.
Other initiatives
In tandem with the proposals, Project MindForge, an industry consortium that MAS set up two years ago to co-develop an AI framework, released a risk management executive handbook on how to adopt and implement responsible and safe use of the technology.
Chia also announced an initiative to support financial institutions on complex AI problems of common interest by bringing them together with technology providers and research institutes.
The first such problem is the inability of existing large language models to comprehend Singlish, the informal English used in Singapore that incorporates elements of Chinese and the Malay language.
The Agency for Science, Technology and Research, a government body, will partner financial institutions to develop a voice-to-text AI to transcribe conversations in Singlish.
Chia said MAS is also supporting financial institutions at the early stage of AI adoption with an initiative called Pathfin.ai, a platform of industry-validated solutions.
Institutions will be able to use the platform to find and implement the most effective AI solutions, saving them the time and effort of having to start from scratch.
Solutions offered on the platform include using AI to optimise multi-currency cash management for corporate treasuries, and for end-to-end insurance claims processing.
