Monetary Authority of Singapore Moves: Establishes Special Task Force to Counter AI Fraud and Quantum Computing Threats

Author: CNA

Compiled by: TechFlow

TechFlow Editor's Note: The Monetary Authority of Singapore (MAS) has rarely established a special task force to address AI fraud and quantum computing threats, requiring banks to complete quantum encryption migration by 2030. When regulators begin setting timelines for technical risks 5-10 years down the road, it indicates that the traditional financial security system is facing a generational crisis.

The Monetary Authority of Singapore (MAS) announced on Tuesday that it has jointly established a task force with the Association of Banks in Singapore (ABS) to address cybersecurity and fraud risks posed by artificial intelligence and quantum computing to financial institutions.

Figure: Skyscrapers stand in clusters in Singapore's financial district. Source: Channel News Asia.

MAS Managing Director Ravi Menon stated at a press conference that the task force will focus on enhancing the professional capabilities of financial institutions in using AI in the field of cybersecurity, testing advanced tools, and formulating industry guidelines and new countermeasures against AI-driven threats.

Besides AI, Menon also pointed out that quantum computing technology poses a "significant risk" to the data security and communications of financial institutions. Although the technology is still in its early stages of development, MAS will release a set of "regulatory expectations" later this year, setting a progressive timeline for financial institutions to address quantum security issues.

"Our goal is to enable financial institutions to achieve quantum safety before the end of this century," he said.

New Threats and Challenges

MAS and ABS stated in a joint statement that the establishment of the "AI-Driven Cyber and Technology Risk Task Force" (ACT) is to address emerging risks brought by frontier AI models. The task force has been in operation since May this year.

Task force members include MAS and senior technology and cybersecurity heads from DBS Bank, OCBC Bank, UOB, Singapore Exchange, NETS, and Banking Computer Services Company.

MAS and ABS stated that the task force will promote industry sharing of AI cybersecurity use cases and experiences, enhance cyber defense knowledge, and strengthen the cybersecurity posture of financial institutions.

ABS Chief Executive Ong Ai Wen stated: "AI is reshaping the cyber threat landscape, and the financial industry must continue to work together to maintain resilience."

Menon pointed out that AI enables phishing scams to achieve personalization and persuasiveness on a "scaled" basis. Friction mechanisms in digital banking transactions still help hinder scammers, but banks must utilize AI and strengthen control measures to better defend against increasingly complex methods.

MAS will review banks' efforts to improve the effectiveness of fraud detection models, including their level of AI usage.

MAS is also collaborating with the Government Technology Agency, the Police Force, and five banks to test whether AI models trained on cross-bank and public-private sector data can improve the overall detection capability of fraudulent transactions. Test results are expected to be released next year.

Menon also stated that frontier AI models can discover and exploit system vulnerabilities, posing a threat to the cyber defense of financial institutions.

Frontier AI models can discover more vulnerabilities and shorten the time from discovery to exploitation. "These factors collectively significantly compress the time window for patching, testing, and remediation."

In April this year, MAS issued a notice calling on financial institutions to strengthen cyber defense; in July, it required key financial institutions to conduct AI-assisted "red team" testing on internet-facing critical systems, i.e., using advanced AI models to identify potential attack paths.

These requirements are about to be further upgraded. MAS will issue regulatory expectations, requiring key financial institutions to formulate and submit comprehensive assessment and action plans to strengthen defense capabilities against AI-driven cyber threats.

These plans will cover the ability of financial institutions to detect and patch vulnerabilities on a large scale, test system changes before implementation, and back up, recover, and restart critical systems and services in the event of an outage.

Quantum Computing Risks

Menon stated that quantum computing poses a "significant risk" to the data security and communications used by financial institutions in the medium term.

Experts estimate that quantum computing may crack existing encryption technologies within 5 to 10 years. He stated that the transition to quantum-safe practices requires time.

"It is absolutely not too early to start making serious preparations now," he said.

Regarding the regulatory expectations to be released later this year, Menon stated that MAS will set a progressive timeline for financial institutions: establish an inventory of cryptographic assets, formulate priorities for migrating vulnerable assets to quantum-safe solutions, and establish technical capabilities and governance frameworks to support quantum-safe migration.

In the past few years, MAS has begun to lay the foundation for a quantum-safe financial industry, such as issuing transition measure recommendations to financial institutions in 2024 and carrying out technical work on encryption technology solutions with industry and international partners.

In addition, Menon stated that Singapore has launched important measures and made significant progress in enhancing the resilience of digital financial services against fraud, operational disruptions, and cybersecurity threats.

For example, banks have launched a "fund lock" feature, which can lock funds into a state where digital transfers are not possible. As of May 2026, the funds protected by this feature reached 47 billion Singapore dollars, doubling compared to a year ago.

The number of fraud cases and the amount of losses in Singapore in 2025 have both decreased.

MAS has also been collaborating with financial institutions to improve the effectiveness of risk management frameworks and has enhanced the resilience of retail payments.

Since August last year, contactless NETS debit payments can continue to be used within certain limits during bank system outages. MAS is also collaborating with major banks to launch features that allow payments and transfers to continue during system outages.