October Global Regulatory Brief: Digital finance

The Global Regulatory Brief provides monthly insights on the latest risk and regulatory developments. This brief was written by Bloomberg’s Regulatory Affairs Specialists.

As technology continues to reshape financial services, regulators and policy setters are embarking on a range of digital-finance initiatives to manage risks and set appropriate standards. The following digital finance policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative to learn more:

• UK: FCA Publishes Feedback on AI Live Testing Initiative
• Singapore: MAS Launches Knowledge Hub to Boost Industry in AI
• Australia: Treasury proposes crypto platform regulations
• South Africa: Regulators consult on cybersecurity & incident reporting standards

FCA publishes feedback on AI live testing initiative

On 10 September 2025, the FCA released a Feedback Statement on its proposed AI Live Testing Initiative, summarising industry responses to its April 2025 Engagement Paper. The initiative aims to offer a sandbox-like environment for firms to test advanced AI systems under real-world conditions. 

This feedback will shape the FCA’s first AI Live Testing Cohort, for which applications now close on 15 September 2025 (extended deadline). The cohort is expected to run for 12 months from October. A formal evaluation report will follow.

In parallel, the FCA confirmed it will continue applying existing regulatory frameworks, such as the Consumer Duty and SMCR, to AI rather than introducing AI-specific rules via its new AI  webpage.

Key takeaways

• The FCA received 67 responses from a wide cross-section of stakeholders, including banks, insurers, startups, Big Tech, academia, and consultancies.
• Broad support exists for the initiative as a tool to address the “last mile” challenge, where regulatory uncertainty impedes AI deployment.
• Key concerns include:
  • Difficulty in ensuring explainability and ongoing monitoring of AI models.
  • Misalignment between current compliance frameworks and AI-specific risks.
  • Lack of transparency in third-party AI offerings.
  • Ambiguity around what constitutes “reasonable steps” under SMCR when approving AI systems.
  • Operational resilience risks associated with AI model failure.
  • Specific challenges related to large language models, such as accuracy, fairness, and treatment of vulnerable consumers.

• Respondents proposed:
  • Developing standardised benchmarks for AI model evaluation.
  • Stress testing AI systems under extreme but plausible scenarios.
  • Clearer expectations on fairness and bias mitigation.
  • Greater international alignment and cross-industry collaboration (e.g. NIST, Singapore’s AI Verify).

Next steps

• Applications for Cohort 1 of the AI Live Testing Initiative close 15 September 2025.
• The FCA plans to publish an evaluation report after the 12-month testing period.
• Firms should consult the FCA’s newly launched AI webpage for guidance on regulatory expectations under existing frameworks.

MAS launches PathFin.ai knowledge hub to boost industry literacy and innovation in AI

Summary

In a speech by Minister Chee Hong Tat, the Monetary Authority of Singapore (MAS) announced the launch of the PathFin.ai knowledge hub, a strategic initiative to boost AI adoption, literacy, and innovation across Singapore’s financial sector. This launch is part of a two-pronged strategy—upgrading the AI ecosystem and upskilling the workforce—designed to ensure the sector remains competitive amidst global shifts in technology, trade, and climate change. The government confirmed its commitment to ensuring AI augments workers, with the goal of uplifting AI literacy for all employees while providing clarity on supervisory expectations for responsible AI use.

In more detail

Strategic vision and context

• Growth Driver: The financial sector is critical to Singapore’s economy, growing by 6.8% last year, and is essential for creating high-value jobs for locals. AI is identified as a major force capable of adding significant value to the global sector.
• Two Key Pillars: To maintain competitiveness, the sector will focus on: 

1. Continuously upgrading the AI ecosystem to promote knowledge exchange and innovation;
2. Uplifting and upskilling the workforce to be AI-ready.

Pillar 1: Upgrading the AI ccosystem

• PathFin.ai Knowledge Hub: Launched under the existing PathFin.ai program (which involves over 80 FIs), the hub is a new resource for peer learning. It features an initial set of successful AI use cases and learnings curated by industry participants in key areas like sales, risk management, and tech. The goal is to reduce the time and effort required for individual FIs to implement AI solutions by learning from shared experiences.
• Enhancing Supervisory Clarity: MAS plans to boost industry confidence in innovation by clarifying its expectations on AI risk management.
  • Building on the FEAT principles (Fairness, Ethics, Accountability, Transparency), MAS will consult the industry later this year on new supervisory guidelines on AI risk management.
  • Concurrently, MAS is developing the Project MindForge AI risk management handbook for publication later this year, which will provide practitioners’ perspectives to guide responsible AI deployment.

Pillar 2: Preparing the AI-ready workforce

• Jobs Transformation Map (JTM): MAS and IBF, in partnership with WSG, developed a JTM to study how Generative AI will reshape jobs and skills. Pilot programs with 10 FIs are testing and refining the approach.
• Universal AI Literacy: The core principle is to “leave no one behind” by lifting foundational AI skills for all workers (e.g., prompt design, AI governance). The three local banks have committed to training all 35,000 of their Singapore employees in the next 1–2 years using IBF-accredited programs.
• Augmentation over Replacement: The strategy is to augment employees with role-specific AI tools, streamlining routine tasks to enable them to take on higher-value and more complex work, thereby improving productivity and career progression (e.g., Manulife underwriters, Bank of Singapore RMs).
• Talent Pipeline: IBF is working with Institutes of Higher Learning (IHLs) and FIs (like UBS and UOB) to establish internships and traineeships for young talent to gain practical exposure to AI use cases in finance early in their careers.

Next steps

• MAS Consults on AI Risk Guidelines: MAS will formally consult the industry later this year on new supervisory guidelines for AI risk management.
• Publish Practitioner Handbook: The Project MindForge AI risk management handbook will be published later this year to assist FIs with responsible AI implementation.
• Expand PathFin.ai Hub Content: MAS and industry partners will progressively enhance the PathFin.ai knowledge hub with more peer-validated use cases, resources, and solutions.
• Complete Mass AI Literacy Training: The three local banks are expected to complete the training of their 35,000 employees in foundational AI literacy within the next 1 to 2 years.
• Union and FI Collaboration: FIs and unions are encouraged to utilize platforms like the NTUC Company Training Committee (CTC) grant and roll out IBF-accredited courses to accelerate the upskilling of the financial sector workforce.

The Australian government proposes legislation for crypto platforms

Treasury presented proposals for new rules affecting digital asset platforms (DAPs) and tokenised custody platforms (TCPs) in Australia. The focus of the legislation is on businesses that hold assets on behalf of clients, rather than on the digital assets themselves. It is part of the Government’s commitment in the 2024-2025 budget to modernise Australia’s digital asset regulation.

Background

The draft legislation seeks to capture DAPs and TCPs by introducing each as new financial products. Where digital assets already fall within existing financial product definitions, the proposed laws will largely apply to activities involving those assets in the same way they do now. However, the proposals introduce targeted elements of risk mitigation, regulatory clarity, and “right-sized” obligations – in a way that facilitates innovations without sacrificing consumer protections.

Anyone providing specified services in relation to DAPs or TCPs will be treated as providing a financial service. Providers of financial services will need to hold an Australian Financial Services Licence (AFSL), the same licence required for other financial service providers. Using the existing AFSL framework avoids the need for a new licensing regime. It also reduces complexity and gives industry and consumers the benefit of familiar rules and protections.

Last week, ASIC had proposed extending class relief for intermediaries engaging in the secondary distribution of a second stablecoin issued by an Australian financial services (licenced) issuer. Earlier this month, ASIC granted class relief for intermediaries engaging in the secondary distribution of a stablecoin issued by an AFS licensed issuer. ASIC advised at the time that as and when more issuers of eligible stablecoins obtain an AFS licence, it will consider extending the same relief to intermediaries distributing those stablecoins. ASIC is working closely with Treasury as it looks to implement the Government’s digital assets reforms.

In developing its legislative proposals, Treasury considered the recommendations proposed by the FSB and IOSCO, and have been guided by them in developing the current reforms. These recommendations aim to ensure a level-playing field between traditional and emerging financial intermediaries.

Next steps

Treasury’s consultation closes on 24 October 2025.

South African regulators issue consultation on upcoming cybersecurity & incident reporting standards

Context

The Financial Sector Conduct Authority (FSCA) and the Prudential Authority (PA) have issued two key Joint Standards that reshape regulatory expectations for financial institutions:

• Joint Standard 1 of 2023 – IT Governance and Risk Management (effective 15 November 2024)
• Joint Standard 2 of 2024 – Cybersecurity and Cyber Resilience Requirements (effective 1 June 2025)

Together, these standards define notification obligations for material IT and cyber incidents across regulated financial institutions.

Current development, consultation on notification framework

In September 2025, the Authorities released Joint Communication 3 of 2025 for industry consultation, including:

• Annexure A: Draft Determination outlining the formal notification process.
• Annexure B: Draft template for reporting material IT and cyber incidents.
• Annexure C: Comment template for feedback (submissions due 5 October 2025).

Implications

Regulators are tightening expectations around timely and standardized incident reporting.