Singapore's central bank expands funding for AI model development, deployment, and governance in financial services.

Singapore's central bank has allocated an aggregate of up to S$250 million under the Financial Sector Technology and Innovation Scheme (FSTI 3.0) to co-fund AI-driven risk models, positioning the city-state as a global hub for AI innovation in financial services. The combined funding comprises an initial S$150 million commitment running until March 2026 and a supplementary S$100 million injection announced in July 2024 specifically targeting quantum and AI capabilities. This makes FSTI 3.0 one of the most substantial government-backed fintech grant programmes globally in its focus on artificial intelligence for financial risk management.

FSTI 3.0 Funding Structure and AI Focus

The Monetary Authority of Singapore (MAS) launched FSTI 3.0 as the latest iteration of its flagship innovation scheme, originally introduced in 2015. The programme initially committed up to S$150 million until March 2026, focusing on projects involving cutting-edge technologies, with S$60 million earmarked specifically for quantum computing and additional allocations for AI, ESG fintech, and regulatory technology (regtech) solutions. In July 2024, MAS announced an extra S$100 million dedicated to building quantum and AI capabilities, bringing the total available funding for these technology domains to a reported maximum of S$250 million.

Within this framework, the AI and Data grant scheme under FSTI 3.0 supports financial institutions across the full AI lifecycle: model building and training, deployment of AI models for high-impact use cases, governance and risk management, as well as testing and monitoring. A dedicated track within the programme—the Artificial Intelligence and Data Analytics (AIDA) track—specifically funds AI applications for fraud detection, risk management, and operational efficiency. MAS has stated that the enhanced scheme is designed to help Singapore anchor a centre of excellence for AI capabilities, including application development and solution testing for the financial sector.

Funding Amount (S$ million)Source: Orionmano Industries

AI Risk Model Development and Deployment

FSTI 3.0 provides direct co-funding support for financial institutions to establish AI innovation centres in Singapore. These centres are tasked with building and training AI models, deploying them for high-impact use cases, and managing the associated governance and risk management functions. The AIDA track further extends co-funding specifically for AI risk management solutions, reflecting MAS's recognition that robust risk controls must accompany increased AI adoption.

The funding structure covers a range of qualifying expenses. Manpower expenses for qualifying roles are reimbursed at up to 50% for Singapore Citizens and 25% for non-Singapore Citizens (including permanent residents), for up to 24 months. Beyond salaries, eligible costs include professional services fees, hardware and software infrastructure and licences, and equipment and intellectual property rights. This cost-sharing mechanism is designed to lower the barriers for financial institutions of varying sizes to develop proprietary AI risk models.

MAS has noted that while financial institutions have been progressively adopting AI, the pace and level of readiness vary significantly across the sector. The advent of generative AI has prompted many firms to initiate pilot programmes mapping both opportunities and risks. The grant scheme therefore aims to accelerate adoption and reduce disparities in AI capability, particularly for smaller institutions and fintech companies that may lack the scale to invest independently in advanced risk modelling infrastructure.

MAS AI Risk Management Toolkit

Alongside the funding expansion, MAS launched the AI Risk Management Toolkit for the financial services sector on 20 March 2026, providing accompanying regulatory guidance for AI risk models. This toolkit was developed through the second phase of Project MindForge, an industry consortium led by MAS in collaboration with major financial institutions and other industry partners.

The centrepiece of the Toolkit is the AI Risk Management Operationalisation Handbook, which provides detailed implementation guidance on managing risks across traditional AI, generative AI, and emerging agentic AI technologies. The Handbook is organised into four sections aligned with MAS's proposed Guidelines on AI Risk Management, which were the subject of a public consultation. A supplement featuring AI case studies documents the experiences and lessons learned from financial institutions that have deployed AI risk models, offering practical reference points for industry practitioners.

This dual approach—combining substantial grant funding with structured regulatory guidance—signals MAS's intent to simultaneously enable innovation and enforce risk discipline. The Toolkit addresses a critical gap identified by the industry: the need for standardised frameworks to validate, monitor, and govern AI risk models in a heavily regulated sector.

Eligibility and Application Process

Eligible applicants for FSTI 3.0 grants include Singapore-based financial institutions, fintech companies, global technology firms establishing centres of excellence in Singapore, as well as research institutions and industry consortia. The programme specifically encourages projects that involve cutting-edge technologies—including AI, quantum computing, ESG fintech, and regtech—and that demonstrate potential for significant industry impact and scalability.

FSTI 3.0 funding support covers up to 50% and 25% co-funding on manpower expenses for qualifying roles for Singapore Citizens and non-Singapore Citizens respectively, for a period of up to 24 months. Additional qualifying expenses include professional services, hardware and software infrastructure and licences, and equipment and IP rights. All expenses are reimbursed on a co-funding basis.

Applicants are required to submit their applications at least three months before the projected commencement of the project to facilitate discussion and processing. MAS advises interested parties to engage directly with the central bank's fintech office via email at fintech_office@mas.gov.sg to discuss proposed project ideas prior to formal submission.

With further funding rounds expected post-March 2026 and ongoing industry collaboration through initiatives like Project MindForge, MAS is likely to deepen support for AI risk model innovation in Singapore's financial sector. The combination of targeted grant funding and a structured risk management toolkit positions Singapore as a regulated testbed where financial institutions can develop and deploy AI risk models within a clear governance framework.