AI Demonstrates Immediate Impact! FSC Releases "Guidelines for the Financial Industry's Use of Artificial Intelligence (AI)"

The Financial Supervisory Commission (FSC) today released the "Guidelines for the Financial Industry's Use of Artificial Intelligence (AI)", aiming to encourage financial institutions to leverage technology responsibly and innovatively, utilize trustworthy artificial intelligence (AI), and develop financial services that better meet the needs of the public.

Reasons for the FSC to Promote AI Compliance

On October 17, 2023, the Financial Supervisory Commission (FSC) released the "Core Principles and Related Policies for the Financial Industry to Use Artificial Intelligence (AI)," followed by the drafting of guidelines based on these core principles. During this period, the FSC referred to relevant guidelines issued by other governments and international organizations, and solicited opinions from various sectors and experts through public policy participation platforms, fintech-related conferences, and two consultations on AI guidelines. After multiple adjustments, the "Guidelines for the Financial Industry to Use AI" were finally released today as a reference for financial institutions to introduce, use, and manage AI.

Guidelines for AI Utilization in the Financial Industry

The newly released "Guidelines for AI Utilization in the Financial Industry" are mainly divided into general principles and six chapters:

General Principles

The general principles section mainly explains common issues such as AI-related definitions, AI system life cycles, factors to consider in risk assessment, ways to implement core principles based on risks, and supervision and management of third-party operators.

Six Chapters

The six chapters explain the key points that financial institutions should focus on and the measures they can take in implementing the six core principles based on the AI life cycle and assessed risks, including purposes, main concepts, corresponding precautions for each principle, implementation methods, or measures to be taken.

Key Points of the Guidelines

Chapter One: Risk Management

Risk management by financial institutions may involve external reviews. The guidelines specify that financial institutions may establish mechanisms for review and evaluation by independent third parties with AI expertise as needed, according to their own expertise and resources.

Chapter Two: Use of Generative AI

Considering that financial institutions may not always be able to grasp the results generated by generative AI, but to ensure the fairness and human controllability of AI systems, the guidelines require financial institutions to control the risks of generative AI developed by third-party operators.

Chapter Three: Customer Privacy Protection

Referencing the EU's General Data Protection Regulation (GDPR), the guidelines require financial institutions to adopt the "data minimization principle" to avoid collecting excessive or unnecessary information.

Chapter Four: System Explainability and Transparency

Financial institutions should ensure the explainability of AI systems. However, considering that if they commission other operators to develop or purchase AI systems, they may not fully know the operational details of the system due to commercial confidentiality, the "explainability" is limited to financial institutions clearly explaining how "AI systems developed and used by themselves or commissioned" operate and the logic behind their predictions or decision-making processes. In addition, to enhance market trust in AI systems, financial institutions can actively inform stakeholders of their practices in using AI systems through reports, technical documents, or disclosing relevant information on their websites.

Nature of Administrative Guidance

The FSC emphasizes that these guidelines mainly provide matters that financial industry participants should pay attention to when introducing and using AI and are of an administrative guidance nature. Financial industry-related associations that have established self-regulatory standards for using AI can refer to this guidance for relevant key points and measures. If no relevant self-regulatory standards have been set, financial institutions are advised to refer to these guidelines for the introduction, use, and management of AI systems.