# Taiwan FSC AI Guidelines: Guidelines for Artificial Intelligence (AI) Applications in the Financial Industry

Source: https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-ai-guidelines-2024
Last updated: Nov 12, 2026

Taiwan's Financial Supervisory Commission published the Guidelines for AI Applications in the Financial Industry on 20 June 2024. They turn the FSC's six core principles of October 2023 into general provisions and six chapters of points to watch across the AI system life cycle, applied on a risk basis. The Guidelines describe themselves as 'administrative and non-binding in nature', and the FSC publishes an official English translation. For a bank they are the FSC's reference on governance, fairness, privacy, security, transparency and third-party management of AI, including generative AI.

## At a glance

| Field | Value |
| --- | --- |
| Authority | [Taiwan (FSC / MODA)](https://www.bankingnewsai.com/ai-regulation/taiwan) |
| Type | Guidance |
| Status | Final |
| Published | Jun 20, 2024 |
| Applies to | The institution types the Guidelines list, including financial holding companies, banks, credit cooperatives, bills finance companies, credit card companies, trust enterprises, electronic payment institutions, securities, futures and investment trust and consulting firms, insurers and insurance agents and brokers. Administrative guidance, non-binding. Branches of foreign groups in Taiwan that are provided with AI applications by their group may follow group regulations |
| Official text | https://law.fsc.gov.tw/EngLawContent.aspx?id=2690&lan=E |

## Key points

- Structure: General Provisions plus six chapters, one per core principle: governance and accountability, fairness and human-centred values, privacy and customer interests, system robustness and security, transparency and explainability, sustainable development.
- Life cycle (General Provisions II): four stages, namely system planning and design, data collection and input, model building and validation, and system deployment and monitoring. An institution that buys or commissions a system is advised to identify how far it can monitor and control risk at each stage and to define the division of responsibilities with vendors by contract.
- Risk assessment (General Provisions III): six factors, namely whether the system serves customers directly or has a significant impact on operations, extent of use of personal data, extent of AI autonomy, complexity, extent and reach of impact on stakeholders, and integrity of relief options. Credit scoring and robo-advice ('robotic financial management systems') are given as examples that usually carry higher risk, intelligent customer service as one that may carry lower risk; the institution decides the risk level.
- Higher-risk systems (General Provisions IV): beyond the chapter measures, the institution must evaluate whether to adopt more comprehensive records, more frequent and wider monitoring and control, a more stringent review and approval process at an elevated decision-making level, and independent verification by a third-party audit or evaluation unit if necessary.
- Third-party providers (General Provisions V): review the provider's knowledge, expertise and experience and the concentration risk; sign written contracts on scope, responsibilities and recourse; where customer data is transmitted, agree terms that 'clearly require encrypted data transmission, secure storage, and data disposal upon termination of services'; set up a data or system migration mechanism for termination; and require operation records.
- Governance (Chapter 1): a senior executive or committee able to oversee inter-departmental business may be designated for overall supervision of AI; AI risk management is integrated into the existing risk management and internal control framework, including model risk management, information security, data protection and treating customers fairly.
- Human oversight and generative AI (Chapter 2): defines human-in-command, human-in-the-loop and human-over-the-loop supervision. Where an institution uses generative AI developed by a third party and cannot control the training process or ensure fair results, risks in its output 'must be objectively and professionally controlled by its personnel'.
- Customers (Chapters 2, 3 and 5): institutions are advised to inform customers, respect their right to choose whether to use AI services and remind them of alternatives; before AI interacts directly with a consumer, 'it is advisable to proactively inform the consumer that the interaction or service is provided with automated response from an AI system'; remedies are encouraged but may be withheld for money-laundering prevention or fraud-detection systems where unsuitable.

## What changed for banks

The Guidelines gave Taiwan's financial sector a detailed, life-cycle AI reference from the regulator. The FSC consulted on the draft through the government's public participation platform, fintech meetings and two consultation meetings, and adjusted it at industry's request: institutions may choose more cost-effective ways to mitigate risk, the risk examples do not fix risk levels, review by an independent third party is optional, and explainability is limited to systems an institution develops itself or commissions. They remain guidance. Article 16 of the AI Basic Act of January 2026 now directs sectoral regulators such as the FSC to set risk-based management rules where needed.

## Use cases it governs

- [AI governance (general)](https://www.bankingnewsai.com/ai-regulation/by-use-case#governance-general)
- [Model risk management](https://www.bankingnewsai.com/ai-regulation/by-use-case#model-risk)
- [Third-party & vendor AI](https://www.bankingnewsai.com/ai-regulation/by-use-case#third-party-vendors)
- [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)
- [Credit scoring & underwriting](https://www.bankingnewsai.com/ai-regulation/by-use-case#credit-underwriting)
- [Cybersecurity](https://www.bankingnewsai.com/ai-regulation/by-use-case#cybersecurity)

## FAQ

### Are the Taiwan FSC AI Guidelines mandatory for banks?

No. The preface says 'These guidelines are administrative and non-binding in nature and are formulated to encourage the financial industry to introduce, use, and manage AI while controlling risks.' Institutions may choose risk-mitigation mechanisms suited to the risks of their own AI systems, including more cost-effective methods.

### How do the Guidelines treat generative AI?

They define generative AI as AI systems that can generate content such as text, images, audio, video and code. An institution introducing it is advised to assess whether it is biased or discriminatory against specific groups, and where it uses generative AI developed by a third party and cannot control the training process, risks in the output must be objectively and professionally controlled by its personnel.

### Do the Guidelines apply to AI supplied to a Taiwan branch by a foreign parent group?

A footnote to the preface says: 'If branch offices of foreign groups in Taiwan are provided with AI applications by the group, they may be processed in accordance with group regulations.'

### What do the Guidelines say about telling customers they are dealing with AI?

Before an institution uses AI to interact directly with a consumer, it is advisable to proactively inform the consumer that the interaction or service is an automated response from an AI system, and to respect the customer's right to choose whether to use AI services, with a reminder of the alternatives.

## 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 Core Principles](https://www.bankingnewsai.com/ai-regulation/documents/taiwan-fsc-ai-core-principles-2023) — Core Principles and Policies for Artificial Intelligence (AI) Applications in the Financial Industry (Oct 17, 2023)
- [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=2690&lan=E) for the rule and this page for the summary and dates.

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