BSP sets STARS principles for responsible AI use in financial sector

• Photo courtesy of BSP

The Bangko Sentral ng Pilipinas (BSP) is urging banks and other supervised financial institutions to follow five principles known as STARS as they adopt artificial intelligence across their operations.

STARS stands for sustainability, transparency, accountability, responsibility, and security. The principles are intended to help financial institutions use AI to improve services while managing risks, protecting consumers, and maintaining trust in the financial system.

The guidelines were issued through Memorandum No. M-2026-031 dated June 24, 2026, titled “Governance Principles for Artificial Intelligence in Financial Services.”

The memorandum provides guidance for BSP-supervised financial institutions in developing their own AI governance and risk management frameworks.

“AI is spreading across BSFI operations and STARS provides them with principles that can help them innovate while mitigating unintended consequences from the use of the technology,” BSP Deputy Governor Lyn I. Javier said.

“We want BSFIs to take advantage of AI, especially to serve their customers, and do so while being guided by developing global standards,” she added.

The memorandum applies to all BSP-supervised financial institutions and covers outsourced service providers supporting AI-related activities under a shared responsibility model.

The implementation of the principles should be proportionate to the nature, extent, scale, complexity, and materiality of an institution’s AI systems. It should also consider the institution’s operational complexity and overall risk profile.

While the STARS principles are voluntary and non-binding, the BSP said they represent its minimum supervisory expectations for the adoption of AI.

Financial institutions are encouraged to integrate the principles into their governance frameworks, risk management strategies, and operational processes.

AI and other emerging technology risks will continue to be covered by the BSP’s existing Information Technology Risk Management framework, particularly in areas involving information security, outsourcing, and project management.

The central bank said the STARS principles are aligned with guidelines developed by the Organisation for Economic Co-operation and Development, the Association of Southeast Asian Nations, the Financial Stability Institute, and other organizations.

The issuance forms part of the BSP’s efforts to support responsible technology adoption while promoting financial stability and inclusion.

The full memorandum is accessible through the BSP website:

https://www.bsp.gov.ph/Regulations/Issuances/2026/M-2026-031.pdf​.​​​