Written Answer · 2023-08-02 · Parliament 14
Impact of Artificial Intelligence on Trading Platforms in Financial Markets
The question focused on AI in financial trading platforms — risks of "herding" effects and conflicts of interest. The government replied that MAS uses technology-neutral regulation, applies FEAT principles for fairness and transparency, and views current AI use as still early-stage with relatively low risk — but will continue monitoring and collaborate with industry on responsible AI use.
Key Points
- • Regulation requires conflict-of-interest controls
- • FEAT principles safeguard fairness
- • AI trading risk currently low
Emphasises regulation and continuous monitoring of AI risk.
Focuses on AI-driven conflicts of interest and herding.
Push responsible AI use in finance.
"MAS requires regulated financial institutions to have controls in place to avoid or mitigate conflicts between their interests and those of their customers."
Participants (2)
Original Text (English)
SPRS Hansard · Fetched: 2026-05-02
2 Dr Tan Wu Meng asked the Prime Minister whether MAS has assessed the impact of artificial intelligence (AI) on trading platforms in financial markets for (i) the risk of "herding" where individual actors make similar decisions due to similar trained AI models or similar data aggregates and (ii) the potential for conflict of interest when a trading AI platform system is simultaneously considering both the platform's interest and the customers' interests, especially if without disclosure to customers.
Mr Lawrence Wong (for the Prime Minister) : The Monetary Authority of Singapore (MAS) requires regulated financial institutions (FIs) to have controls in place to avoid or mitigate conflicts between their interests and those of their customers. This approach is technology-neutral and is applied across all regulated FIs .
As early as 2018, MAS introduced the Fairness, Ethics, Accountability and Transparency ( FEAT) Principles to guide FIs’ responsible use of artificial intelligence and data analytics (AIDA) in their products and services. Amongst other things, these principles require FIs to ensure that AIDA adoption does not result in customers being treated less fairly than the business. FIs are also required to provide customers transparent disclosures on the FIs' products and services, to facilitate informed decision-making.
The risk of herding in trading platforms arising from the use of a rtificial intelligence ( AI) models is currently assessed to be low as FIs in Singapore are still at a nascent stage of using AI models for decision-making. Nevertheless, MAS continues to carefully monitor and assess the risks brought about by AI in financial markets. In recent years, MAS has worked with the industry to develop a framework which enables FIs to evaluate their AI systems against the FEAT Principles. MAS will continue to engage the industry on the responsible use of AI in finance.