MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is preparing to issue new regulations aimed at mitigating the potential risks posed by the use of artificial intelligence (AI) in the financial services sector, an official said.
Melchor Plabasan, senior director of the BSP’s Technology Risk and Innovation Supervision Department, said the new rules to be released within the first half of this year aim to address gaps in existing regulations that do not yet cover some AI-specific risks.
“We all know that AI is one of the main drivers of the industrial revolution. Our financial institutions are already leveraging AI for hyper-personalization, seamless client onboarding, fraud detection, credit scoring and customer service,” he said.
”But AI also introduces new risks that must be managed,” he added.
According to Plabasan, existing risk management frameworks already cover around 80 to 90 percent of AI-related risks including technology, cybersecurity and data privacy.
Thus, the forthcoming regulations will focus on “untouched areas,” including the ethical use of AI, managing bias and ensuring accuracy in AI-driven decision-making.
“The remaining 10 to 20 percent of AI risks are what we plan to cover in our upcoming regulations,” he said.
The regulator conducted a thematic review last year to assess the extent of AI adoption in the financial services sector.
Plabasan said the review showed that many financial institutions have already integrated AI into their operations, with some establishing centralized AI units comprising data scientists and engineers.
He said these financial institutions expect increased profitability and improved operational efficiency as a result of AI adoption.
However, the BSP wants to ensure that these benefits do not come at the expense of consumer protection, data privacy and fairness.
“AI needs to be human-centric. While it can drive groundbreaking benefits, humans should remain in control of its direction,” Plabasan said.
The BSP encourages collaboration among financial institutions, regulators and other stakeholders to build a secure and trusted digital financial ecosystem.
It has also pushed financial institutions to conduct regular stress testing and risk assessments when deploying AI systems, particularly in areas like fraud detection and credit scoring.
“We want to foster an enabling regulatory environment that promotes responsible and ethical use of AI in financial services,” Plabasan said.