Singapore: Adopted MAS artificial intelligence model risk management observations for financial institutions including design requirements

On 5 December 2024, the Monetary Authority of Singapore (MAS) published a review of observations on the risk management of artificial intelligence models for financial institutions. The review identifies principal practices for the management of AI-related risks within the financial sector, including those associated with generative AI. The review highlights the necessity for governance structures, effective risk identification and comprehensive processes across the entire AI lifecycle. It is recommended that banks maintain inventories of AI models, conduct systematic assessments of risk materiality and implement standards for the development, validation and monitoring of these models. Generative AI is approached with caution, with a focus on internal use cases designed to enhance efficiency.