AI News

On 5 January 2025, International Mometary Fund (IMF) published a blog titled ‘How Artificial Intelligence Will Affect Asia’s Economies’, discussing the implications of artificial intelligence (AI) on labour markets across the Asia-Pacific region. The blog, based on findings from the October 2024 Asia-Pacific Regional Economic Outlook, delves into how AI can enhance productivity and innovation while also posing risks of deepening inequality both within and across nations. The IMF’s blog published in January 2024 by IMF Managing Director Kristalina Georgieva and AI Preparedness Index served as a foundation for understanding the uneven readiness of countries to harness AI’s transformative power. The report revealed that advanced economies, such as Singapore, the United States, and Denmark, lead the way in AI adoption, scoring high on metrics such as digital infrastructure, human capital, and regulatory frameworks. These nations stand to benefit significantly from AI, with about 60% of...

On 12 December 2024, the Bank for International Settlements (BIS) released a FSI Insights on policy implementation No 63 titled "Regulating AI in the Financial Sector: Recent Developments and Main Challenges." This information paper, authored by the Financial Stability Institute (FSI), provides an in-depth exploration of the increasing use of artificial intelligence (AI) in the financial sector. With AI’s transformative potential to revolutionise banking and insurance practices, the report examines the challenges posed by AI adoption and outlines a regulatory framework to mitigate associated risks while fostering innovation. The paper draws attention to the rapid expansion of AI technologies, particularly in areas such as customer support, fraud detection, and credit and insurance underwriting. These applications have enhanced operational efficiency, improved customer experience, and optimised decision-making processes. However, the exponential growth of AI adoption, particularly...

On 26 December 2024, the Reserve Bank of India (RBI) announced the formation of the Committee for the Framework for Responsible and Ethical Enablement of Artificial Intelligence (FREE-AI) in the financial sector. This initiative, introduced in the Developmental and Regulatory Policies Statement on 6 December 2024, aims to create a robust governance framework for the responsible and ethical adoption of artificial intelligence (AI) in India's financial ecosystem. By combining innovative technologies with stringent oversight, the RBI intends to address the challenges posed by AI while ensuring customer protection and operational resilience. The FREE-AI Committee will be chaired by Dr. Pushpak Bhattacharyya, Professor at IIT Bombay, and comprises distinguished experts from various fields including academia, government, technology, and finance. Notable members include Ms. Debjani Ghosh, a former president of NASSCOM and a Distinguished Fellow at NITI Aayog; Dr. Balaraman Ravindran, Head...

On 18 December 2024, the Swiss Financial Market Supervisory Authority (FINMA) issued FINMA Guidance 08/2024 ‘Governance and risk management when using artificial intelligence’ for supervised financial institutions using artificial intelligence (AI). This move highlights FINMA's focus on addressing the operational, legal, and reputational risks associated with AI while promoting robust oversight practices in Switzerland's financial sector. The rapid adoption of AI has transformed financial markets, presenting significant opportunities but also risks that are often difficult to evaluate. FINMA’s guidance aims to ensure that supervised institutions adopt a proactive approach to identifying, assessing, and managing risks associated with AI. This effort reflects FINMA’s commitment to maintaining the reputation of Switzerland’s financial centre while helping institutions safeguard their business models in an evolving technological landscape. FINMA has observed that most institutions remain...

On 5 December 2024, the Monetary Authority of Singapore published an information paper outlining good and ethical practices for Artificial Intelligence (AI) and Generative AI model risk management. The paper is based on the findings of thematic review conducted in mid-2024 that evaluated AI practices across selected banks. Through this paper, MAS discusses the importance of good governance, risk management systems, and development protocols for AI and Generative AI. The authority encouraged all financial institutions to adopt these practices to ensure responsible AI deployment and innovation. The information paper also elaborates on AI’s transformative potential in enhancing operational efficiency, customer engagement, and risk management. However, it also highlights the risks associated with its use, including financial, operational, regulatory, and reputational challenges. The review conducted in mid-2024 taken into account how banks are currently navigating these risks, with an...

On 5 December 2024, the United States Commodity Futures Trading Commission issued an advisory concerning the use of artificial intelligence in markets under its jurisdiction. The advisory, released by the Divisions of Clearing and Risk, Data, Market Oversight, and Market Participants, aims to guide registered entities and registrants in maintaining compliance with the United States Commodity Exchange Act and associated regulations while adopting artificial intelligence technologies. This advisory recognises the transformative potential of artificial intelligence in derivatives markets and highlights the responsibilities of regulated entities to integrate this technology without compromising their statutory and regulatory obligations. The advisory recognises the growing role of artificial intelligence in financial markets and the potential benefits and risks associated with its use. It draws on multiple sources, including public comments, industry engagements, and guidance from United...

On 27 November 2024, the Monetary Authority of Singapore published the Singapore’s 2024 Financial Stability Review, offering an incisive analysis of the challenges and opportunities in an increasingly uncertain global economic landscape. The document evaluates macrofinancial risks, corporate and household sector vulnerabilities, and the health of the financial sector, while also addressing emerging themes such as virtual assets, artificial intelligence (AI), and quantum technologies. The MAS FSR 2024 outlines the challenges posed by a volatile global macrofinancial environment. With geopolitical conflicts, trade tensions, and elevated debt levels across advanced and emerging economies, the probability of adverse financial shocks remains high. Key vulnerabilities include stretched asset valuations, fiscal imbalances, and the risk of sudden corrections in financial markets. While emerging markets in Asia are better positioned with stronger buffers, policymakers are cautioned to...

On 13 November 2024, Michael Debabrata Patra, Deputy Governor of the Reserve Bank of India, delivered an influential inaugural address at the DEPR Conference in Jaipur. His speech, titled "Digital Technology, Productivity, and Economic Growth in India," explored how digitalisation, artificial intelligence, and virtual digital currencies are shaping economies, improving productivity, and unlocking transformative growth opportunities for India and other emerging markets. Michael Debabrata Patra discussed the transformative role of artificial intelligence, robotics, and virtual digital currencies, equating their potential to historic technological revolutions like steam power and personal computing. Generative artificial intelligence alone is projected to contribute between seven and ten trillion US dollars to global GDP within the next three years. In India, digital technologies currently account for ten per cent of GDP and are expected to grow to twenty per cent by 2026. This puts...

On 8 November 2024, David Fairfull, former Chief Executive Officer of the artificial intelligence marketing company Metigy, appeared before the Downing Centre Local Court in Sydney, Australia, to answer allegations of misleading investors and abusing his position as a director for personal gain. The case, led by the Australian Securities and Investments Commission (ASIC), represents a landmark in the governance of artificial intelligence firms, where the need for transparency and ethical accountability has never been greater as AI continues to transform industries and attract substantial investment. 1041E(1) of the Australian Corporations Act 2001 and an additional charge of dishonestly using his directorial position for personal benefit, in violation of section 184(2) of the same Act. ASIC’s investigation alleges that between 2018 and 2021, while actively seeking investor funding, Mr Fairfull provided exaggerated revenue and income figures for Metigy, an AI-powered digital marketing...

On 3 November 2024, the Monetary Authority of Singapore (MAS) announced the ninth annual Singapore FinTech Festival (SFF), scheduled to take place from 6 to 8 November 2024. Organised by the Monetary Authority of Singapore in collaboration with the Global Finance & Technology Network and Constellar, this year’s event will place a special emphasis on artificial intelligence and quantum technology, underlining their growing importance in transforming the financial sector. The festival aims to serve as a collaborative platform where industry leaders, policymakers, and technology experts can come together to explore the possibilities these technologies offer, as well as their implications for areas such as decarbonisation, digital asset adoption, efficient cross-border payments, and financial inclusion. The festival’s main events will be preceded by the Insights Forum, an invitation-only event held on 4 and 5 November. This forum will feature the Layer One Summit, focused on...

On 10 October 2024, Gary Gensler, the Chair of the United States Securities and Exchange Commission (US SEC), delivered a statement regarding the risks of fraud and deception in the context of artificial intelligence and its application in finance. His remarks discussed the timeless nature of fraud under US securities law and how new tools, such as AI, present both opportunities and risks. Gensler focused on the evolving challenges AI poses for investor protection, with a specific emphasis on programmable, predictable, and unpredictable harm. Gensler began by referencing a key historical figure in computer science, Alan Turing, and his famous 1950 question, “Can machines think?” He used this reference to highlight the relevance of Turing’s question in today’s world of securities law, particularly regarding fraud and manipulation. Gensler discussed that although AI represents an advanced tool for today’s market participants, fraud remains fraud under US securities law, regardless of...

On 3 October 2024, the G7 Competition Authorities and Policymakers Summit met in Rome, Italy, to address the competitive challenges presented by the rapid advancement of artificial intelligence technologies, including Generative AI (GenAI). This gathering, hosted by the Italian Competition Authority, followed up on discussions initiated during the G7 Industry, Technology and Digital Ministerial Meeting in March 2024 and the Tokyo Summit in 2023. The discussions in Rome centered around ensuring that AI-driven innovations foster healthy competition while mitigating risks of market concentration and unfair practices. The US Justice Department’s Antitrust Division and the Federal Trade Commission participated in the summit. The communiqué discusses the transformative potential of AI for economies and societies along with its ability to increase productivity and spur innovation across multiple sectors. However, the communiqué also stresses that to fully reap the benefits of AI, it is...