萬國法律事務所

In light of the increasing use of AI in the financial services sector, Taiwan’s Financial Supervisory Commission (FSC) proposed new guidelines regarding the use of AI in the financial industry. These new guidelines are in accordance with the relevant guidelines of the European Union, Singapore, the United States, and the Bank for International Settlements (BIS), and the International Organization of Securities Commissions (IOSCO). On December 28, 2023 the FSC opened a 60-day public opinion period regarding these proposed, new guidelines.

The proposed guidelines consist of a general section and six chapters. The general section provides common guidance on AI-related definitions, the AI system lifecycle, risk assessment framework, the way to implement core principles based on risk, and the supervision of third-party service providers. The six chapters explain the key points and measures that financial institutions should pay attention to when implementing the six core principles, including purpose, key concepts, and implementation methods. The draft also emphasizes that due to the high correlation between the core principles, financial institutions should comprehensively evaluate the feasibility of adopting the key points or measures when referring to the draft to introduce and use AI systems, avoiding focusing on a single principle to fully control risk.

According to the FSC's explanation, the proposed draft is administrative guidance. The purpose of the draft is to encourage financial institutions to introduce, use, and manage AI in a risk-controlled manner. The FSC also emphasizes that financial institutions can refer to the draft to implement the six core principles, while reiterating they can also take more cost-effective methods to achieve these goals.

The draft also mentions that relevant associations in the financial industry can refer to the draft to incorporate the relevant key points and measures when establishing self-regulatory rules on the use of AI in the future. If there are no relevant self-regulatory rules, the FSC recommends that financial institutions can apply the principles of the draft directly to introduce, use, and manage AI systems.