The Monetary Authority of Singapore (MAS) announced plans to regulate the use of artificial intelligence and data analytics (AIDA) in the country’s financial sector. Known as ‘Veritas’, the goal is to work with actors in the financial industry to get out in front of the technology’s adoption, in the hopes that it will continue to ethically serve the public. One of the three key areas to be addressed is fraud detection.
The issue is pressing. The explosion of AI based technologies makes customer data ever more valuable to both legitimate businesses and cyber criminals. Account takeover attacks (ATO) continue to rise every year, with fraudsters trading sophisticated techniques and data breach files on the dark web that can then be used to hijack customer financial accounts.
Therefore, there is concern that businesses with legitimate access to troves of consumer financial data will make it easier for hackers and other illegitimate actors to make illicit use of the insights provided by data crunching. For example, a successful attack on a company’s financial system back-end might result in thieves having access to a consumers’ shopping patterns across the internet.
“This framework, known as Veritas, will enable financial institutions to evaluate their AIDA-driven solutions against the principles of fairness, ethics, accountability and transparency (FEAT) that MAS co-created with the financial industry last year to strengthen internal governance around the application of AI and the management and use of data,” the statement said.
Establishing governance regulation and oversight is never quick and easy. Financial data, which is complex and requires multiple stakeholder input, is no exception. However, Dr. David Hardoon, a MAS special advisor, stressed the transformative nature of the melding of financial data with advanced technology powered analysis is a problem that businesses within Singapore require clear guidance for both now and in the future.
“AI has the potential to transform financial services, but it must be used in a safe and responsible manner. Good governance is essential to AI adoption in the financial industry,” he said in the statement. “With FEAT and Veritas, financial instituitons will have the guideposts and toolkit to institute sound AI governance practices. This will pave the way for a vibrant and responsible AI-driven financial centre in Singapore.”