Singapore's central bank will consult financial firms in the city state in a bid to better understand the implications of their use of artificial intelligence (AI) and data analytics, according to a report in the local press.

According to The Business Times, the consultation being undertaken by the Monetary Authority of Singapore (MAS) could lead to the development of new guidelines for financial services firms.

MAS' chief data officer, David Hardoor, told the newspaper: "Our objective is to foster innovative uses of AI and data analytics that take into account fairness, ethics, accountability and transparency in delivering services to customers. The nascent use of AI and data analytics in the financial sector gives us an opportunity to move ahead of the curve and set the right conditions for its ethical and proper use."

"We look forward to working with the industry and the public to understand the opportunities and challenges ahead," he said.

Financial services firms in Singapore could be granted a share of SIN$27 million ($20m) to help them adopt and integrate AI and data analytics, according to The Business Times report.

According to a report by Accenture earlier this year, 76% of bankers believe that "the majority of organisations in the banking industry will deploy AI interfaces as their primary point for interacting with customers" in the next three years. The responses also indicated that analysing data and gleaning insights, boosting productivity and lowering costs are the main reasons why banks will invest in AI user interfaces, it said.

Further research by analytics firm Earnix revealed that machine learning is being used for predictive analytical modelling by over half of top insurance firms worldwide.

There are existing guidelines that MAS has issued on managing technology risk for firms operating in Singapore.

The guidelines address issues such as data security and incident reporting, systems resilience and migration, disaster recovery, the management of IT outsourcing risks including in the context of cloud computing, and customer authentication for online financial services.

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