MAS TRM + PDPA Compliant AI for Singapore

Singapore's position as a global financial hub comes with regulatory rigor. For financial institutions deploying AI knowledge systems, two frameworks define the compliance landscape: the Monetary Authority of Singapore's Technology Risk Management (TRM) Guidelines and the Personal Data Protection Act (PDPA).

This guide translates regulatory requirements into actionable technical architecture decisions.

The Regulatory Landscape

MAS TRM Guidelines (2024 Revision)

The TRM Guidelines apply to all financial institutions regulated by MAS, including banks, insurers, capital markets intermediaries, and fund managers.

Key Requirements for AI Systems:

Requirement	TRM Reference	AI System Implication
Technology Risk Governance	4.1-4.3	Board oversight of AI adoption
IT Project Management	5.1-5.4	Documented AI implementation lifecycle
Software Development	6.1-6.3	Secure AI model deployment practices
System Reliability	8.1-8.3	Availability and performance monitoring
Data Security	9.1-9.4	Encryption, access control, DLP
Third-Party Management	12.1-12.5	AI vendor due diligence

PDPA Requirements

The PDPA governs personal data handling with specific obligations:

Core Obligations:

• Consent: Obtain consent before collecting personal data
• Purpose Limitation: Use data only for disclosed purposes
• Access and Correction: Provide individuals access to their data
• Data Breach Notification: Report breaches to PDPC within 3 days
• Transfer Limitation: Cross-border transfers only to adequate jurisdictions

AI-Specific Considerations:

• Training data containing personal data requires consent
• AI outputs derived from personal data inherit protection requirements
• Automated decision-making triggers transparency obligations

Architecture Requirements

Data Residency

For Singapore financial institutions, data residency is typically mandatory:

Requirement: Personal data and confidential business data must remain in Singapore or approved jurisdictions.

Architecture Response:

┌─────────────────────────────────────────┐
│     SINGAPORE DATA CENTER               │
│  ┌─────────────┐  ┌─────────────────┐  │
│  │  AI Compute │  │  Vector Storage │  │
│  │  (Azure SG) │  │  (Singapore)    │  │
│  └─────────────┘  └─────────────────┘  │
│           │               │             │
│           └───────┬───────┘             │
│                   │                     │
│  ┌────────────────┴────────────────┐   │
│  │      Application Layer           │   │
│  │    (Singapore-hosted RAG)        │   │
│  └──────────────────────────────────┘   │
└─────────────────────────────────────────┘

Critical: Ensure AI inference does not route through non-Singapore endpoints—even for "privacy-preserving" operations.

Audit Trail Requirements

MAS TRM requires comprehensive logging:

What Must Be Logged:

• All queries to the AI system
• Document access by user and timestamp
• Model responses (summarized or full)
• Administrative actions and configuration changes
• Security events and access anomalies

Log Retention:

• Minimum 5 years for financial records
• 7 years recommended for audit defensibility
• Immutable storage with cryptographic integrity

Sample Audit Record:

{
  "timestamp": "2026-01-01T09:30:00+08:00",
  "user": "analyst@bank.com.sg",
  "action": "QUERY",
  "query_hash": "sha256:abc123...",
  "documents_accessed": ["doc-001", "doc-002"],
  "response_tokens": 450,
  "sensitivity_level": "CONFIDENTIAL",
  "session_id": "sess-789xyz"
}

Access Control Architecture

Multi-level access control required:

User Classification:

• Privileged administrators
• Business users (by department/function)
• External auditors (read-only, time-limited)
• Automated systems (service accounts)

Document Classification:

• Public (marketing materials)
• Internal (operational documents)
• Confidential (business strategies)
• Restricted (personal data, compliance records)

Access Matrix Example:

User Type	Public	Internal	Confidential	Restricted
Admin	✓	✓	✓	✓
Senior Analyst	✓	✓	✓	Request
Junior Analyst	✓	✓	Request	✗
Auditor	✓	✓	✓	✓

Encryption Requirements

Data at Rest:

• AES-256 encryption minimum
• Key management via HSM or cloud KMS
• Singapore-resident key storage

Data in Transit:

• TLS 1.3 for all communications
• Certificate pinning for mobile applications
• mTLS for inter-service communication

Application Layer:

• Field-level encryption for sensitive data
• Tokenization for personal identifiers
• Secure key rotation procedures

Deployment Models

Option 1: Singapore Private Cloud

Architecture:

• Dedicated compute in Azure Singapore / AWS AP-Southeast-1
• Single-tenant deployment with VPC isolation
• Azure OpenAI Singapore endpoint for inference

Compliance Posture:

• Data residency: ✓ (Singapore only)
• Vendor management: Standard cloud provider due diligence
• Audit access: Full visibility via cloud logging

Best For: Most financial institutions requiring speed and scalability

Option 2: Sovereign On-Premise

Architecture:

• Hardware deployed in client data center
• Local LLM (Llama, Mistral) without cloud connectivity
• Complete network isolation

Compliance Posture:

• Data residency: ✓ (Physical control)
• Vendor management: Hardware vendor only
• Audit access: Complete control

Best For: Institutions with strictest confidentiality requirements

Option 3: Hybrid Configuration

Architecture:

• Non-sensitive workloads on Singapore cloud
• Sensitive workloads on isolated local hardware
• Secure gateway between environments

Compliance Posture:

• Data residency: ✓ (With proper data classification)
• Vendor management: Dual approach
• Audit access: Federated logging

Best For: Large institutions with varied sensitivity levels

Vendor Due Diligence Requirements

Under MAS TRM Section 12, AI vendors must be assessed:

Assessment Criteria

Security Controls:

• SOC 2 Type II certification
• ISO 27001 compliance
• Penetration testing results
• Vulnerability management practices

Business Continuity:

• Disaster recovery capabilities
• RTO/RPO commitments
• Geographic redundancy

Data Handling:

• Data processing locations
• Subprocessor disclosure
• Data deletion procedures
• Breach notification SLAs

Contractual Requirements:

• Right to audit
• Security incident notification (24 hours)
• Data return/deletion upon termination
• Insurance coverage

Oxaide Compliance Posture

Requirement	Oxaide Status
Singapore Data Residency	✓ Singapore-only deployment available
SOC 2 Type II	In progress
ISO 27001	Aligned controls
PDPA Compliance	✓ Data processor registration
Audit Right	✓ Included in enterprise agreements
Incident Notification	< 24 hours

Implementation Workflow

Phase 1: Regulatory Assessment (Week 1)

Activities:

• Map AI use cases to regulatory requirements
• Identify personal data processing activities
• Classify document sensitivity levels
• Define access control requirements

Deliverables:

• Regulatory impact assessment
• Data classification matrix
• Access control specification

Phase 2: Architecture Design (Week 2)

Activities:

• Select deployment model
• Design network architecture
• Specify encryption requirements
• Plan audit logging infrastructure

Deliverables:

• Technical architecture document
• Security control mapping
• Compliance checklist

Phase 3: Vendor Qualification (Week 2-3)

Activities:

• Execute vendor due diligence
• Review security documentation
• Negotiate contractual terms
• Obtain board/risk committee approval

Deliverables:

• Vendor risk assessment
• Contract with compliance provisions
• Board approval documentation

Phase 4: Deployment (Week 3-4)

Activities:

• Infrastructure provisioning
• Security control implementation
• Integration testing
• User acceptance testing

Deliverables:

• Deployed system
• Security configuration documentation
• Test results

Phase 5: Compliance Validation (Week 5)

Activities:

• Internal audit of controls
• Penetration testing
• Access control verification
• Audit log validation

Deliverables:

• Compliance validation report
• Remediation plan (if required)
• Go-live approval

Ongoing Compliance

Periodic Reviews

Monthly:

• Access log review
• Security incident review
• Performance monitoring

Quarterly:

• User access recertification
• Vendor performance review
• Control effectiveness assessment

Annually:

• Comprehensive security audit
• Vendor risk reassessment
• Regulatory update review
• Board risk reporting

Regulatory Change Management

MAS TRM and PDPA evolve regularly. Maintain:

1. Regulatory monitoring: Track MAS circulars and PDPC guidelines
2. Impact assessment: Evaluate changes against current architecture
3. Update planning: Schedule compliance updates
4. Documentation: Maintain compliance evidence

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Next Steps

For Singapore financial institutions evaluating AI knowledge systems:

1. Regulatory Consultation: Review your specific MAS classification and requirements
2. Architecture Workshop: Design compliant infrastructure
3. Vendor Qualification: Complete due diligence process

Schedule Compliance Review | View Architecture Options

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Related reading:

• Enterprise Security for AI Knowledge Systems
• Sovereign AI for Family Offices
• AI Regulation in Customer Support