What does Taiwan AI Basic Act say about AI in banking?

What are the key points of Taiwan AI Basic Act?

• Article 3 defines artificial intelligence as 'a system capable of autonomous operation, which, through input or sensing and by means of machine learning and algorithms, can generate outputs such as predictions, content, recommendations, or decisions that affect physical or virtual environments to achieve explicit or implicit objectives'.
• Article 4 sets seven principles: sustainable development and well-being; human autonomy; privacy protection and data governance; cybersecurity and safety; transparency and explainability; fairness and non-discrimination; and accountability.
• Article 5: the government shall ensure that the application of AI does not infringe life, body, liberty or property, disrupt social order, national security or the ecological environment, or involve conduct that violates laws, 'including bias, discrimination, false advertising, or the dissemination of misleading or false information'. An AI product or system identified as a high-risk application by the sectoral authority in consultation with the Ministry of Digital Affairs 'shall come with advisory notices or warnings'.
• Article 6: the Executive Yuan establishes a National AI Strategic Committee, convened by the Premier and meeting at least once a year, to coordinate, promote and supervise national AI affairs and formulate the National AI Development Guidelines.
• Article 16: the Ministry of Digital Affairs promotes 'an AI risk taxonomy and assessment framework that is interoperable with international frameworks'; the competent authorities for the relevant industries follow it, as needed for AI application risk management, 'to establish risk-based management regulations', and assist industries in formulating 'their own industry guidelines and codes of conduct'.
• Article 17: for the application of high-risk AI, the government 'shall clarify the attribution of liability and the conditions for such liability, and shall establish relief, compensation, or insurance mechanisms'. Research and development before actual application is exempt unless it is tested in a real-world environment or its results are used to provide products or services.
• Article 18: the government reviews its laws and administrative measures and, 'within two years of the effective date of this Act', completes their enactment, amendment or repeal; until then, matters existing rules do not cover are interpreted and applied in line with the Act. The Ministry of Digital Affairs dates the deadline to 13 January 2028.
• Articles 11 and 14: sectoral authorities may establish 'a safe environment for innovative AI R&D and application services experimentation', and are to promote personal data protection by design and by default in consultation with the personal data protection authority.

What did Taiwan AI Basic Act change for banks?

Before the Act, AI governance for Taiwan's banks rested on the FSC's 2024 Guidelines and on existing law. The Act adds a statutory layer above that guidance: a national committee convened by the Premier, a risk framework from the Ministry of Digital Affairs (issued on 7 July 2026) and a direction to each sectoral regulator to set risk-based rules where needed. It does not itself classify any banking use of AI as high-risk or prohibit any practice; those determinations are left to sectoral regulators applying the framework.