Banking on AI policies

MANILA, Philippines — Artificial intelligence (AI) has been reshaping our world and has integrated itself into our daily lives. The biometric security on our phones, the grammar-checking tools we use to write emails, and the personalized recommendations on media streaming platforms are powered by AI.

Generative AI, in particular, has been thrust into public consciousness. IBM defines generative AI as AI “that can create original content—such as text, images, video, audio or software code—in response to a user’s prompt or query.”

Many of us are now familiar with how generative AI works. As shown by a recent World Bank report, the Philippines ranked 4th in global ChatGPT use. As of March 2024, ChatGPT monthly traffic from the country reached 94.38 million visits, accounting for 4.03 percent of the app’s global traffic. The report attributed this to the strong business process outsourcing (BPO) sector and the country’s information and communications technology (ICT) presence. But while AI can be beneficial for work, school and creative pursuits, the proliferation of these tools has also raised concerns about potential issues.

The duality of AI

Is AI a double-edged sword? This is the exact question that Asian Institute of Management Prof. Philip Kwa posed during his presentation at the BPI Cybersecurity and Consumer Protection Conference last July 31, 2024. In his talk about the cybersecurity implications of AI, he talked about how AI can be used to strengthen cybersecurity measures by identifying patterns and anomalies that could signal potential threats, speeding up incident response and recovery and using AI-powered threat intelligence. However, AI can also be used for cybersecurity threats. These may include the use of AI to automate malware campaigns, generate phishing messages and create realistic deepfakes.

With the pros and cons of AI, Prof. Kwa explained that we should have an open mind about using AI, especially since it can be a catalyst for growth and innovation. To this point, the continued use of AI must be approached with responsible practices and policies to harness its benefits and mitigate risks.

Policies and strategies

With its growing use, AI has now made its way into political discussions. For instance, the government has started to respond to emerging AI technologies through proposed bills and strategies. Various bills in the House of Representatives aim to regulate the use and development of AI technologies. The AI Development and Regulation Act (HB 7396) seeks to establish an AI Development Authority to oversee the industry. The AI Regulation Act (HB 7913) proposes an AI Bill of Rights and the creation of a Philippine Council on Artificial Intelligence to develop necessary guidelines and policies. The AI Development Act (HB 7983) aims to establish a National Center for Artificial Intelligence Research to foster innovation and development. To protect workers’ livelihoods from the potential impact of AI automation, the Protection of Labor Against AI Automation Act (HB 9448) proposes regulations to mitigate the adverse effects on employment.

Other government agencies are also creating policy frameworks around AI. The Department of Information and Communications Technology (DICT), in collaboration with the Civil Service Commission (CSC), is preparing a joint memorandum circular (JMC) for Ethical and Trustworthy Use of AI in government. The draft JMC aims to create a policy environment that “nurtures trust in the adoption of AI in a society that is human-centric, research-based, preserves economic innovation and applies to all stakeholders.”

On top of these policies, key government agencies are also leveraging AI technology. For example, the Department of Trade and Industry (DTI) recently launched the National AI Strategy Roadmap (NAISR) 2.0 and the creation of the Center for AI Research (CAIR). The NAISR 2.0, an updated version of the strategy launched in 2021, aims to enhance the country’s capacity for innovation by creating an AI ecosystem that considers ethical principles and by fostering AI research and development. Meanwhile, the CAIR studies AI, machine learning, and generative AI solutions for the improvement of government and citizen services.

The policies and strategies discussed above emphasize a balancing act: regulating the use of AI while driving innovation. This delicate equilibrium will have significant implications across various segments of society, including the private sector.

Future-ready

Aside from the public sphere, AI has found its way into the financial industry. The Bank of the Philippine Islands (BPI), for instance, is leveraging technology and AI to make the bank future-ready. Our Track and Plan tool, available in the BPI app, exemplifies this approach. Track and Plan provides AI-powered analysis to generate a summary of a customer’s financial transactions (cash flow, e-wallet transfers) so they can better manage and grow their funds. Through this technology, we help our customers understand their spending and saving habits to achieve financial freedom. We are also looking forward to introducing the BPI Express Assist (BEA) AI soon, a ChatGPT-driven tool for internal use to answer questions about products, services and policies. This is an innovation that will ensure consistent service delivery across all our channels to improve efficiency.

Embracing AI showcases how we are shaping the future of banking through technology. As customers become increasingly accustomed to the uses of AI, we are committed to adapting our services to meet their needs. Through these innovations, we stay true to our broader digital transformation goals, providing personalized banking experiences and creating efficient services for our clients.

As AI continues to become a part of the fabric of our lives, it is important to navigate its potential benefits and risks with foresight. Thus, policies that aim to balance regulation and innovation can provide institutions such as those in the financial sector to create more personalized, efficient and safe banking experiences. Ultimately, the successful use and development of AI can be achieved by building a future where technology serves the best interests of individuals and society.

*  *  *

Jose Teodoro “TG” Limcaoco is the president and CEO of the Bank of the Philippine Islands. He is also the president of the Bankers Association of the Philippines.