MAS Launches AI Risk Management Handbook

As artificial intelligence (AI) becomes a part of life, regulators have been working hard to build the underlying infrastructure so that AI can be integrated properly and safely. On March 20, the Monetary Authority of Singapore (MAS) announced the successful conclusion of phase two of Project MindForge¹, culminating in the publication of the MindForge AI Risk Management Toolkit (Toolkit) for the financial services sector. This Toolkit, developed collaboratively by a consortium of 24 leading banks, insurance companies, capital market firms, and other industry partners, provides financial institutions with resources for managing AI-related risks across traditional AI, generative AI, and emerging agentic AI technologies.

The Toolkit features the Mindforge AI Risk Management Operationalisation Handbook (Handbook) which provides detailed, practical guidance on implementing AI risk management frameworks. The Handbook is accompanied by a supplement that features a compilation of AI case studies that document the experiences and lessons learned from financial institutions. The examples offer insights into the challenges, approaches and risk management practices when using AI in different organisational contexts.

MAS is currently reviewing responses to an earlier public consultation on a set of Guidelines on AI Risk Management (Guidelines). The Handbook, which is aligned with MAS’ proposed Guidelines, is organised into four sections:

1. Scope and oversight. Establishment of AI governance framework, and clarity of roles and responsibility for AI oversight.
2. AI risk management. Identification of AI usage, risk materiality assessment, and AI inventorisation through organisational systems, policies and procedures.
3. AI lifecycle management. Implementation of controls covering the entire lifecycle of AI use.
4. Enablers. Development of organisational capabilities, infrastructure, and resources to enable ongoing responsible AI use and risk management.

To ensure the Handbook’s currency and relevance, it will be periodically updated as the use of AI in the industry matures, and also to reflect MAS’ supervisory expectations. To facilitate broader industry adoption of AI risk management practices and solutions, MAS will establish an AI risk management workgroup comprising the MindForge consortium members and other industry practitioners. The move is part of the BuildFin.ai initiative to develop implementation resources, facilitate knowledge sharing, and build capabilities and frameworks for managing risks from newer AI technologies such as agentic AI.

“The development of the MindForge AI Risk Management Toolkit, including the release of the Operationalisation Handbook, marks a major step forward in our journey to ensure the responsible adoption of AI in finance,” says Kenneth Gay, Chief FinTech Officer, MAS. “We are committed to fostering a culture of continuous engagement and strengthening of AI governance and risk management practices across the industry. The BuildFin.ai programme² also serves as a foundation for our next phase of collaboration in AI risk management, to bolster the safe adoption of AI across the financial industry.”

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¹ Project MindForge, launched by MAS in mid-2023, aims to strengthen AI risk management for financial institutions deploying AI technologies in their services and operations.

² MAS' BuildFin.ai programme is a collaborative initiative aimed at bringing together technology providers and research institutes to work with financial institutions on complex issues.