Managing Artificial Intelligence: The Monetary Authority Of Singapore's Recommendations On AI Model Risk Management

Introduction and Background

On 5 December 2024, as part of the Monetary Authority of Singapore's (MAS) incremental efforts to ensure responsible use of artificial intelligence (AI) in Singapore's financial sector, MAS published recommendations on AI model risk management in an information paper¹ following a review of AI-related practices of selected banks.

In the information paper, MAS stressed that the good practices highlighted in the information paper should apply to other financial institutions. This alert briefly outlines key recommendations in the information paper, with three key focus areas that MAS expects banks and financial institutions to keep in mind when developing and deploying AI, which covers (1) oversight and governance of AI, (2) key risk management systems and processes for AI, and (3) development, validation and deployment of AI.