In order to assist financial institutions in leveraging the benefits of AI technology, and to effectively manage risks, ensure fairness, protect consumer rights, maintain system security, and achieve sustainable development, the Financial Supervisory Commission (FSC) today released a document that it drafted with reference to international practices and industry feedback, and after soliciting external feedback through the public policy participation platform "JOIN" and other channels. This document is titled "Core Principles and Policies for AI Applications in the Financial Industry," which outlines six core principles and eight supporting policies for AI application, in the financial sector.
The above six core principles are as follows:
1.Establishing governance and accountability mechanisms: This principle emphasizes that financial institutions should be responsible for internal governance and protection of consumer rights when using AI systems, and should also establish comprehensive and effective risk management mechanisms while ensuring that their employees have sufficient knowledge and capabilities in AI.
2.Emphasizing fairness and human-centric values: This principle highlights that financial institutions should strive to mitigate unfairness caused by algorithmic bias and adhere to human-centric and controllable principles when utilizing AI systems.
3.Safeguarding privacy and customer rights: This principle stresses that financial institutions should fully respect and protect customer privacy when managing and using customer data, and also respect the customer's choice regarding the use of AI services while informing the customer about the availability of alternative options.
4.Ensuring system robustness and security: This principle emphasizes that financial institutions should commit to maintain the robustness and security of AI systems, and exercise proper risk management and oversight over third-party providers.
5.Emphasizing transparency and explainability: This principle underscores that financial institutions should ensure transparency and explainability in AI system operations, and should appropriately disclose relevant information when using AI to interact directly with consumers.
6.Promoting sustainable development: This principle highlights that financial institutions should ensure that their development strategies and implementations align with sustainable development principles when using AI systems, and make efforts to protect the right to work for employees.
The FSC has also launched the following eight supporting policies in response to AI development: (1) the establishment of the "Guidelines for AI Applications in the Financial Industry," (2) the review of relevant regulations and necessary regulatory adjustments, (3) the utilization of AI technologies in suptech, (4) exchanges and collaborations with international organizations and foreign financial regulatory agencies, (5) the encouragement of active participation by the financial sector in AI research, development, and application, as well as the adoption of best practices, (6) the assessment of the actual use of AI in the financial industry, (7) the requirement for financial industry associations to establish self-regulatory standards and best practices for AI system usage, and (8) the oversight of financial institutions to ensure fair treatment of customers and compliance with friendly financial guidelines, as well as to reduce digital divide through financial literacy programs.
The FSC stated that it is currently in the process of developing the "Guidelines for AI Applications in the Financial Industry" based on the six core principles mentioned above. The Guidelines will establish directions for the financial industry in accordance with the proportionality principle and a risk-based approach, and are expected to be completed by the end of 2023. They aim to guide the financial industry in the use of trustworthy AI to develop financial services that are more aligned with the needs of the public, thereby deepening the value of financial inclusion.
Moving forward, the FSC will continue to monitor the challenges and opportunities faced by the financial industry in adopting AI technology, as well as urge financial institutions to strengthen risk management, consumer protection, information security, and digital rights for vulnerable groups. Based on the core philosophy of responsible innovation, the FSC will guide the financial industry to actively adopt technological innovations, promote the upgrading of financial services, enhance the well-being of the public and at the same time balance consumer rights, financial market order, and social responsibility.