# Taiwan FSC AI Core Principles: Core Principles and Policies for Artificial Intelligence (AI) Applications in the Financial Industry

Source: https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-ai-core-principles-2023
Last updated: Nov 12, 2026

Taiwan's Financial Supervisory Commission published the Core Principles and Policies for AI Applications in the Financial Industry on 17 October 2023. The paper sets six core principles for financial institutions that use AI: governance and accountability, fairness and human-centred values, privacy and customer interests, system robustness and security, transparency and explainability, and sustainable development. It also lists eight supporting policies for the FSC, the first being to publish guidelines on AI applications, which followed on 20 June 2024. It is a policy statement, not a binding rule.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [Taiwan (FSC / MODA)](https://www.bankingnewsai.com/ai-regulation/taiwan) |
| Type | Framework |
| Status | Final |
| Published | Oct 17, 2023 |
| Applies to | Financial institutions supervised by Taiwan's Financial Supervisory Commission. A policy statement: it sets principles for institutions and supporting policies for the FSC itself, and creates no direct legal obligation |
| Official text | https://law.fsc.gov.tw/EngLawContent.aspx?id=2693&lan=E |

## Key points

- Principle 1 (governance and accountability): 'Financial institutions should bear internal and external responsibilities corresponding to the AI systems they use'; internal responsibilities 'include assigning a senior executive to be responsible for related oversight and management, and establishing an internal governance framework'.
- Principle 1 also asks for 'a comprehensive and effective AI risk management mechanism', integrated into existing risk management and internal control and periodically evaluated and tested, and for employees with adequate knowledge and skills to work with AI.
- Principle 2 (fairness and human-centred values): avoid unfairness from algorithmic bias; AI should be 'human-centric and controllable by humans'; and 'Risks associated with information produced by generative AI must be objectively and professionally controlled by financial institution personnel.'
- Principle 3 (privacy and customer interests): manage and use customer data properly, respect the customer's right to choose and remind the customer of available alternatives when AI systems are used to provide financial services.
- Principle 4 (robustness and security): ensure system robustness, security and safety, and conduct 'appropriate risk management and oversight of the third-party providers' when development or operation of AI systems is outsourced.
- Principle 5 (transparency and explainability): 'Financial institutions should make proper disclosure when their AI system interacts directly with consumers.' Principle 6 covers sustainable development, including employee training and protection of employees' work rights.
- Supporting policies: the FSC will publish guidelines 'based on the principle of proportionality, using a risk-based approach'; keep its regulation under review; 'where necessary, conduct special financial examinations' of institutions' AI use; and instruct financial industry associations to draft self-regulatory standards and best practices.
- The paper says it draws on the Executive Yuan's AI Taiwan Action Plan 2.0 and on guiding principles issued by financial supervisors of major countries and by international organisations.

## What changed for banks

The paper fixed the structure of what followed: the six principles became the six chapters of the June 2024 Guidelines, and the paper committed the FSC to a proportionate, risk-based approach built on guidelines, review of its existing regulation, industry self-regulation and examinations.

## Use cases it governs

- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Generative & agentic AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#generative-agentic-ai)
- [Customer-facing chatbots](https://www.bankingnewsai.com/ai-regulation/by-use-case#customer-chatbots)
- [Data & privacy](https://www.bankingnewsai.com/ai-regulation/by-use-case#data-privacy)
- [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors)
- [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity)

## FAQ

### What are the six core principles of Taiwan's FSC for AI in finance?

Establishing governance and accountability mechanisms; emphasizing fairness and human-centered values; protecting privacy and customer interests; ensuring system robustness and security; ensuring transparency and explainability; and promoting sustainable development. They were published on 17 October 2023 and each became a chapter of the FSC's June 2024 Guidelines.

### Is the FSC's 2023 AI principles paper binding on banks?

No. It is a policy statement of principles and of the FSC's own supporting policies. It does say the FSC will keep its regulation under review and may conduct special financial examinations where necessary to make sure institutions comply with applicable regulations and manage risk in their use of AI.

### What did the paper say about generative AI?

Under the fairness principle it states that risks associated with information produced by generative AI must be objectively and professionally controlled by financial institution personnel. The June 2024 Guidelines repeat this for generative AI developed by a third party.

## Related documents

- [Taiwan FSC Agentic AI Security Consultation](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-agentic-ai-security-2026) — Consultation Document on the Security of Agentic AI in the Financial Industry (金融業運用代理AI安全諮詢文件) (Oct 13, 2026)
- [Taiwan FSC AI Attack Recommendations](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-ai-attack-recommendations-2026) — Challenges and Strategic Recommendations for the Financial Industry in Responding to AI Attacks (金融業應對AI攻擊的挑戰與策略建議) (Jul 14, 2026)
- [Taiwan AI Risk Taxonomy and Assessment Framework](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-moda-ai-risk-framework-2026) — Artificial Intelligence Risk Taxonomy and Assessment Framework (Version 1.0) (Jul 7, 2026)
- [Taiwan AI Basic Act](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-ai-basic-act-2026) — Artificial Intelligence Basic Act (人工智慧基本法) (Jan 14, 2026)
- [Taiwan FSC AI Guidelines](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-ai-guidelines-2024) — Guidelines for Artificial Intelligence (AI) Applications in the Financial Industry (Jun 20, 2024)
- [OCC Bulletin 2026-54](https://www.bankingnewsai.com/ai-regulation/documents/occ-bulletin-2026-54) — Super Intelligence: Supervisory Framework (Nov 4, 2026)
- [HKMA discussion paper on banks' use of Agentic AI](https://www.bankingnewsai.com/ai-regulation/documents/hkma-agentic-ai-discussion-paper-2026) — Discussion Paper on Agentic A.I. Governance in the Banking Sector (Nov 2, 2026)
- [Machado interview with Bloomberg (Oct 2026)](https://www.bankingnewsai.com/ai-regulation/documents/ecb-machado-bloomberg-interview-2026-10) — Interview with Bloomberg — Pedro Machado (Oct 30, 2026)

Last reviewed Nov 12, 2026. Cite the official text (https://law.fsc.gov.tw/EngLawContent.aspx?id=2693&lan=E) for the rule and this page for the summary and dates.

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