Cheyenne Suarez

BSP lays down framework for use of AI in banking system

The facade of the Bangko Sentral ng Pilipinas, adorned with a new logo featuring a gold-colored, full-bodied Philippine eagle with wings spread upward and stars positioned above,  at the Bangko Sentral Headquarters in Quezon City on February 9, 2024.Maria Tan, ABS-CBN News

Article (news)

Arthur Fuentes

ABS-CBN News

MANILA — The Bangko Sentral ng Pilipinas has laid down a framework for the use of AI by banks and other financial institutions. The BSP said it has issued comprehensive governance principles to guide central bank-supervised financial institutions (BSFIs) in the adoption of artificial intelligence (AI), aiming to drive innovation while safeguarding consumer trust and financial stability.Released under Memorandum No. M-2026-031, the &quot;Governance Principles for Artificial Intelligence in Financial Services&quot; outlines five core principles: sustainability, transparency, accountability, responsibility, and security—collectively known as STARS. The voluntary framework provides a foundation for banks and other financial firms to build their own AI risk management structures.“AI is spreading across BSFI operations, and STARS provides them with principles that can help them innovate while mitigating unintended consequences,” BSP Deputy Governor Lyn I. Javier said. “We want BSFIs to take advantage of AI, especially to serve their customers, and do so while being guided by developing global standards.”The guidelines apply to all BSFIs as well as outsourced service providers supporting AI activities under a shared responsibility model. The BSP noted that implementation should scale proportionally with a firm&#x27;s operational complexity and the specific risks of its AI systems.The BSP emphasized that emerging tech risks remain covered under its existing Information Technology Risk Management framework.

The framework outlines five core principles: sustainability, transparency, accountability, responsibility, and security.

The framework outlines five core principles: sustainability, transparency, accountability, responsibility, and security.