The global analytics market for finance skyrocketed, as companies realized that tracking data and ensuring accurate reporting can boost their profits to new heights in an ever-competitive world.
The Global Financial analytics market was worth USD 5.89 billion in 2017 and is projected to grow to USD 11.57 billion by 2023 at a CAGR of 11.92% during the period 2018-2023, according to the latest reports.
This is the reason why The Monetary Authority of Singapore, one of the richest states in the world (#7 by GDP per Capita) has issued a set of principles and rules to promote and define fairness, ethics, accountability, and transparency in the use of artificial intelligence and data analytics in finance.
The new set of “regulation” is known as the FEAT Principles. The document establishes new guidelines for companies that provide financial products and services on the topic of responsible use of AI and data analytics.
The reasoning behind FEAT is to strengthen internal governance around data management and use. The Principles also incorporate views and feedback from financial institutions, industry associations, FinTech firms, technology providers and academia.
The very existence of these principles shows what leverage data analytics and artificial intelligence can provide for a company. If one of the richest states in the world felt the need to regulate the use of these practices, it not only means that the benefits are recognized at the highest level, but also that they are anticipating an enormous boom in the times to come.
Although we can already see impressive revenue numbers around AI and data analytics, the adoption is still in its early stages. But the new regulations, given the recognition they provide to the industry, represent an opportunity to expand beyond the traditional boundaries of analytics and to explore other areas that might be improved and are yet left unchecked.
MAS worked closely with a group of senior industry partners through a FEAT Committee in developing the principles. The committee is co-chaired by MAS chief data officer David Hardoon and PrimePartners co-founder and advisor Hsieh Fu Hua. The principles also incorporate views and feedback from financial institutions, industry associations, fintech firms, technology providers and academia.
“The FEAT Principles lay the foundation for a thriving AI and data analytics ecosystem. As the financial industry harnesses the potential of AI and data analytics on an increasing scale, we need to be cognizant of using these technologies in a responsible and ethical manner. The FEAT Principles are a significant first step that MAS has taken with the industry. I would also thank the FEAT committee members for their invaluable contribution towards this process”, according to David Hardoon, MAS Chief Data Officer.
According to the FEAT document, when compared to human decision-making, nature and increasing use of AIDA (artificial intelligence and data analytics) may heighten the risks of systematic misuse. This may result in impacts which are more widespread, perpetuated at greater speed. When used responsibly and effectively, AIDA has significant potential to improve business processes, mitigate risks and facilitate stronger decision-making.
The objectives of this set of Principles are to provide firms providing financial products and services with a set of foundational principles to consider when using AIDA in decision-making, to assist firms in contextualising and operationalizing governance of use of AIDA in their own business models and structures, and to promote public confidence and trust in the use of AIDA.
“It is important to have a common set of principles to refer to as an industry benchmark and guide when thinking about how to use AI and data analytics in a responsible and ethical way. I am confident that the industry will endeavor to put these principles into practice when developing or implementing internal governance around the use of these technologies”, said Hsieh Fu Hua, Co-Founder, and Advisor, PrimePartners and co-chair of the project’s committee.