The Bangko Sentral ng Pilipinas (BSP) is urging banks and nonbanks to develop artificial intelligence governance frameworks, according to a report by Philstar Biz. The move aims to address risks associated with AI adoption, including data privacy concerns, bias, and reputational damage.
The BSP's push comes amid growing reliance on AI in financial services, where algorithms are used for credit scoring, fraud detection, and customer service. The central bank highlighted that without proper governance, AI systems could perpetuate biases or compromise customer data, potentially destabilizing the financial system.
BSP Governor Eli Remolona emphasized that financial institutions must ensure transparency, accountability, and fairness in their AI models. The framework should also include regular audits and human oversight to mitigate risks. This initiative aligns with global efforts to regulate AI in finance, as the BSP seeks to balance innovation with stability.