MAS conducted a thematic review on selected financial institutions’ (FIs) implementation of Fairness Principles in their use of Artificial Intelligence / Machine Learning (AI/ML). The paper highlights observations from the review of the FIs’ policies and governance frameworks to meet the Fairness objectives under the FEAT Principles, and their implementation effectiveness in actual AI/ML use cases. It sets out MAS’ recommendations, good practices and illustrative examples observed from the review.
Information Papers on Environmental Risk Management
These information papers are based on a thematic review conducted by MAS in 2021 on selected banks, insurers and asset managers (collectively financial institutions or FIs), and highlight emerging and/or good practices by FIs and identify areas where further work is needed.
MAS recognises that FIs are at varying stages of putting in place the relevant risk management processes. FIs should refer to the industry practices shared in the paper, and assess the applicability of the practices to their efforts to bolster their resilience to environmental risk in a way that is commensurate to their size, nature of activities and risk profile. Particular attention should be paid to areas where further work is required, as highlighted in the papers.
FIs should also pay attention to the impact of their efforts on business strategies and risks, as well as on the financial system and the broader transition to a sustainable economy. For example, indiscriminate credit withdrawal by banks from sectors deemed to be of higher climate-related risks would impact companies with credible transition plans, increasing the risk of stranded assets and a disorderly transition.
FIs must push ahead to set tangible targets to address environmental risk with urgency and ambition. MAS will continue to partner FIs to accelerate their efforts in translating their environmental risk strategy and risk appetite into concrete milestones and tangible targets for action. Helping stakeholders understand potential business and risk implications through relevant disclosures and education should also be a key area of focus.