service providers. the policy document on the management of customer information and permitted disclosures ( mcipd ) likewise addresses risks to data privacy to consumers. 3 / 5 bis - central bankers'speeches while our current regulatory framework may not necessarily single out ai as a technology, it applies to the use of ai systems and is designed to address risks in a technology - agnostic way. how, then, do we identify and prepare for risks that are still unknown or emerging? globally, financial institutions, regulators and international standard - setting bodies are generally converging on guiding principles for the responsible use of ai. these include fairness, inclusivity, transparency, robustness, and accountability. for financial institutions, responsible ai can be fostered through strong internal governance and risk management practices. at our end, bnm is committed to ensuring that our regulatory framework continues to remain proportionate to risks as we unlock the upsides of innovation. this means creating a conducive environment where responsible innovation and healthy competition are nurtured, novel business models and new entrants are given an opportunity to flourish, and associated risks are managed effectively – especially those that may threaten system - wide stability, consumer outcomes, and confidence in the financial sector. towards this end, the bnm regulatory sandbox can play a key role in facilitating the testing of innovative ai use cases where there are any existing regulatory impediments. in such cases, the sandbox may enable financial institutions to assess the feasibility of new ai - enabled use cases while providing bnm with insights into both opportunities and risks associated with these innovations. so far, the sandbox has played a role in facilitating the testing of innovative use cases and business models, including digital remittance, e - kyc, buy - now - pay - later and digital insurance. finally, it is worth highlighting that the financial industry also plays a role in responsible co - innovation to effectively overcome challenges faced and realise the potential of ai in finance. firstly, the industry can work together to share knowledge, best practices, and ai tools to lower costs, foster the development of common standards, and elevate standards of risk management in this emerging area. one example is the industryled development of ai guidelines and risk management best practices by the chief risk officers'forum. we hope to see further similar efforts across the industry, in addressing areas such as responsible ai use and the development of tools or standards for addressing fairness concerns. secondly, it is key that consumers

' digital and financial literacy continue to improve in line with developments in digital technologies. to this end, financial institutions and the industry have a bigger role to play in increasing financial education and awareness. education will be the first line of defence to protect consumers against more sophisticated genai - enabled scams, improve digital inclusion outcomes, and strengthen confidence in digital financial services. thirdly, the advancements in ai underscore the necessity of evolving and investing in our talent ecosystem to prepare for the workforce of the future. beyond investments in skilled technical developers and it personnel, we also need to cultivate a workforce capable of effectively and safely utilising the next generation of ai tools. in this regard, we look forward to the release of the future skills framework for the malaysian financial sector later this month, an industry 4 / 5 bis - central bankers'speeches initiative led by aicb in collaboration with the islamic banking and finance institute malaysia, and the malaysian insurance institute, as a big step forward in evolving the talent ecosystem in the financial sector. conclusion ladies and gentlemen, in closing, to quote alan turing, the english computer scientist and arguably one of the forefathers of ai, " we can only see a short distance ahead, but we can see plenty there that needs to be done ". ai has the real potential to improve financial services. but it also creates new and complex challenges. while ai systems today are increasingly adept at mimicking human intelligence, they are not infallible. it remains essential that human judgment plays a central role in overseeing and managing risks. by embracing ai responsibly, ensuring ethical standards and robust security measures, we can harness its full spectrum of capabilities to build a more resilient and customercentric financial ecosystem. let's seize this opportunity to innovate responsibly and shape a future where ai in finance enhances transparency, security, and accessibility for all. thank you. 5 / 5 bis - central bankers'speeches