Artificial Intelligence (AI) Model Risk Management

Monetary Authority of Singapore Information Paper on Artificial Intelligence Model Risk Management (Dec 5, 2024) reports findings from a thematic review of banks' AI — including Generative AI — model-risk practices conducted in mid-2024. The paper distils good practices across governance and oversight, key risk-management systems and processes, and development and deployment of AI. Specific recommendations include: cross-functional oversight forums to manage evolving AI risks across the bank; clear principles for fair, ethical, accountable and transparent AI use; AI inventories that maintain a centralised view of usage and dependencies and force risk-materiality assessments; ongoing monitoring, regular audits and revalidation; and safeguards such as input/output filters for hallucinations and bias in generative AI. Direct read-out for SEA banks formalising AI MRM.