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Singapore’s guidelines for AI and data analytics in the financial sector

It is no longer uncommon for financial services companies to use artificial intelligence and data analytics (AIDA) in decision-making in the provision of financial products and services. AIDA can improve business processes, mitigate risks and facilitate stronger decision-making. Despite the benefits, there are concerns of AIDA’s misuse. Impacts from the misuse are expected to become more widespread and spread quickly.

The Monetary Authority of Singapore (MAS) has released a document titled “Principles to Promote Fairness, Ethics, Accountability and Transparency in the Use of Artificial Intelligence and Data Analytics in Singapore’s Financial Sector”. Three objectives are set out: First, to provide financial products and services with foundational principles to guide AIDA based decision-making. Second, to assist firms in contextualising and operationalising governance of use of AIDA in their own business models and structures. Third, the principles seek to promote public confidence and trust in the use of AIDA.

MAS has worked with the financial industry and other relevant stakeholders in the creation of the document. Multiple financial institutions and companies have also offered their perspectives and inputs. Despite the rigour in the creation process, MAS says the principles are not meant to be prescriptive.

No Mean FEAT

Used in relation to each other and mutually reinforcing, the four principles are fairness, ethics, accountability and transparency.

Fairness

Justifiability, and accuracy and bias underpin the first principle of fairness. AIDA-driven decisions should not disadvantage any individual or particular group. Already, current business models are discriminative. By exposing decision-making models to AIDA, there is fear that age-old discrimination will be perpetuated since the algorithms conduct analysis based on segmentation and clustering of data.

Hence MAS suggests that under the subpoint of justifiability, if actions to prevent discrimination are not possible, they must be minimally justified. Furthermore, the use of personal attributes as input factors for AIDA-driven decisions is justified. This is permissible for a firm’s internal governance framework, such as for purposes of customer segmentation to cater unique product offerings.

Additionally, data and models for AIDA-driven decisions should be regularly reviewed and validated for accuracy and relevance. In turn, unintentional bias is minimised. Furthermore, AIDA-driven decisions should be regularly reviewed so models behave as designed and intended.

Ethics

AIDA should be ethical. The code of ethics should be aligned with the firm’s ethical standards, values and codes of conduct. Moreover, AIDA-driven decisions should be held to at least the same ethical standards as human driven decisions.

Accountability

All AIDA-driven decisions must be accounted for. A clear outline of responsibility and ownership should be made clear internally. MAS emphasises that all AIDA-driven decisions, especially those which could have a significant impact on data subjects, need to be based on as accurate an understanding of the data subject as possible. Information about data subjects could increase in accuracy through improved communication channels.

Both internal and external accountability are needed.

Internal accountability suggests that AIDA-driven decision-making is approved by the appropriate internal authority. Secondly, firms using AIDA are accountable for both internally developed and externally sourced AIDA models. Thirdly, the management and Board’s awareness of their use of AIDA needs to continually be raised.

Contrarily, external accountability calls for data subjects to have channels to make enquiries, submit appeals for and request reviews of AIDA-driven decisions that affect them. Secondly, verified and relevant supplementary data from data subjects should be accounted for when reviewing AIDA-driven decisions.

Transparency

Finally, it is important to improve the public’s understanding and confidence in AIDA. Transparency is a key way to avoid unnecessary confusion or unintended opportunities for individuals to exploit or manipulate AIDA models. Determining a good measure of transparency for firms is important as well. Disclosure of intellectual property or proprietary source codes are not necessary.

Hence MAS suggests that AIDA is proactively disclosed to data subjects as part of general communication. Secondly, data subjects should be allowed to be provided, upon request, clear explanations on what data is used to make AIDA-driven decisions about the data subject and how the data affects the decision. This also includes clear explanations on the consequences that AIDA-driven decisions may have on data subjects.

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Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

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CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

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Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

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HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

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IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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