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AI in business: Balancing innovation, ethics and a regulatory framework – Companies

rtificial Intelligence (AI) is now at the forefront of technology. It not only possesses the ability to analyze vast amounts of data to extract patterns and automate routine tasks, but it can also create new data and information to mimic human behavior. Its ability to increase productivity and foster innovation has never been seen before, even with the emergence of previous spectacular technologies. However, its great ability and rapid development has also raised fears. AI that is based on algorithms designed by humans may inherit human bias. Thus, AI may raise ethics concerns. In addition, AI could make labor redundant with improved productivity involving less humans. This has an adverse impact on employment.

Because of all these concerns, a proper understanding of AI is critical to strike a balance between innovation and ethics. In that spirit, on March 5, the Mandiri Investment Forum (MIF) hosted a panel on “Artificial Intelligence and its Potential for Business Transformation”. The panel discussed the progress made in the development and use of AI, how policies can support the ethical and fair implementation of AI in businesses and Indonesia’s digital adaptation.

The development and use of AI

Singapore is among the countries ambitiously embracing AI as part of their development strategy. The country recently announced its plan to spend almost S$1 billion (US$751 million) over the next five years to develop AI activities and become an AI hub in the region and globally. The financial sector is among the leading sectors adopting AI technology, including in Singapore.

The adoption has led to significant changes. Singapore’s financial regulator — the Monetary Authority of Singapore (MAS) — has closely monitored the rapid changes in AI development in the financial sector. Some of the changes include transformative changes, increased operational efficiency, better risk management capabilities and enhanced customer experience in financial institutions.

However, some challenges need to be addressed, including ethical considerations, bias in decision-making processes and potential financial instability. As AI technology continues to advance, regulators and financial institutions must strike a balance between embracing innovation and mitigating associated risks effectively. In Singapore, efforts are underway to develop frameworks and guidelines that will govern the ethical and responsible use of AI in the financial sector. The objective is to maximize its benefits while minimizing potential adverse impacts.

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Views from industry players have taken center stage in better understanding the impacts of AI. Duan Pu, a representative of the Ant Group, a China-based fintech firm, has adopted AI to improve its services for small and medium enterprises (SMEs). By highlighting the contributions of SMEs to job creation, Duan mentioned the challenges faced by small business in applying for loans because of the requirement to provide qualified guarantees.

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