AI Governance
In recent years, artificial intelligence (AI) technology has evolved rapidly, bringing about significant transformation in the delivery of financial services. The Daiwa Securities Group is actively promoting the use of AI to provide better services to our clients, enhance and streamline our operations, and create new value.
At the same time, as the use of AI continues to expand, the importance of appropriate management from the perspectives of fairness, transparency, privacy protection, and safety has grown more than ever. We believe that sincerely addressing the risks of AI making erroneous decisions, the risks of unintended bias, and the risks of improper handling of our clients' important information are a vital social responsibility that we must fulfill as a financial institution.
AI governance is a framework designed to ensure that our clients can use AI with confidence, by appropriately identifying and managing potential risks while maximizing the benefits of AI.
At the Daiwa Securities Group, rather than restricting the use of AI, we are advancing our AI governance initiatives as a foundation for expanding its possibilities in a responsible manner, while safeguarding the trust our clients place in us.
AI Governance Initiatives
With the aim of ensuring that AI is utilized in a manner that contributes to the enrichment and enhanced trust of our clients and society, while giving appropriate consideration to the ethical risks and social impact associated with AI use, the Daiwa Securities Group established the "Group AI Governance Mission Statement" in June 2023, setting forth our fundamental principles.
In addition, we have established the "Group AI Governance Committee" to identify and manage risks related to AI use on a cross-organizational basis, creating a structure for the centralized identification, assessment, and management of AI-related risks.
We have also adopted a "risk-based approach" that flexibly adjusts the level of oversight according to the impact and intended use of each AI system. For AI applications in high-risk areas, we conduct rigorous review processes and ongoing monitoring.
Furthermore, to ensure that AI governance functions effectively across the entire Group, we provide regular training for all employees, working to enhance AI literacy and foster a culture of responsible AI use.
Through these initiatives, guided by the principles of human-centricity, fairness, transparency, and accountability, we strive to achieve the appropriate use of technology in harmony with society, and to realize AI that is trusted by our clients and society at large.
Governance Structure
In 2023, the Daiwa Securities Group established the "Group AI Governance Committee" as the governing body overseeing AI governance across the entire Group. The committee is chaired by the CIO, who serves as the Chief Information Officer responsible for digital strategy, and is composed of executives in charge of core management functions, including sustainability, corporate planning, compliance, human resources, and risk management (CRO). This structure enables the cross-functional and effective management of diverse AI-related issues, encompassing technology, risk, ethics, and talent development.
The committee regularly deliberates on important matters related to AI utilization, reviews case studies, and formulates and revises the AI Governance Mission Statement. To date, the committee has planned and decided on specific measures, including the standardization of review processes through the development of "Risk Review and Mitigation Sheets" that systematically organize and review AI-related risks and clarify necessary countermeasures, deliberations on the introduction of AI services for clients, and the establishment of monitoring rules for the use of generative AI at client touchpoints.
In addition, we continuously monitor trends in AI regulations and guidelines both domestically and internationally, and are advancing our responses in light of changes in the global regulatory environment.
Decisions and deliberations made by the committee are promptly disseminated to each Group company, and through a bidirectional governance cycle that feeds back field-level issues and insights to the committee, we aim to achieve consistent and trusted AI utilization across the entire Group.
Risk Assessment Framework
The Daiwa Securities Group has adopted a risk-based approach that prioritizes responses according to the intended use and impact of each AI system, in order to appropriately manage the risks associated with AI utilization. Rather than imposing uniform and excessive requirements on all AI use cases, we flexibly set management standards according to the magnitude and nature of the risks involved, thereby achieving highly effective governance without impeding the promotion of innovation.
Specifically, at each stage of AI introduction and utilization, we conduct reviews using a Risk Review and Mitigation Sheet. The sheet systematically organizes and reviews risks from multiple perspectives, including the purpose, functionality, and scope of use of the AI system in question, as well as fairness, transparency, personal information protection, and security. This enables us to visualize potential risks prior to deployment and establish a framework that ensures appropriate mitigation measures are in place before AI systems are put into use.
Even after the deployment of AI systems, we continuously monitor their operation, outputs, usage patterns, and impact on business operations and clients through regular monitoring activities. Issues and insights identified in the field are consolidated through the Risk Review and Mitigation Sheets and reported to the committee, where they are reflected in governance reviews and improvements to response policies.
Through these efforts, we work to realize AI utilization that is trusted by our clients and society, by flexibly adapting to changes in the social environment and regulatory landscape, conducting continuous reviews and improvements, and raising the standards of our risk management.
Employee Training
The Daiwa Securities Group is committed to systematic AI education for all employees in order to embed AI governance throughout the organization. At the core of this effort is "Daiwa Digital College," the Group's proprietary learning platform. Through this platform, we offer AI literacy training and digital talent development programs, fostering the development of individuals who can correctly understand AI and utilize it in a responsible manner.
Training has been conducted on a regular basis since fiscal year 2025, with plans to continue in fiscal year 2026 and beyond. These training programs, which target all Group employees, have been completed by nearly all employees. Following the completion of video-based training, comprehension tests are administered to confirm knowledge retention and to raise awareness of appropriate AI use in day-to-day operations.
The Daiwa Securities Group positions the understanding and judgment of each individual employee as a vital foundation of AI governance, and is committed to developing talent that supports sound and trusted AI utilization.
- *For more details on the Daiwa Securities Group's initiatives in talent development and skill enhancement, please refer to the link below.
AI Governance Mission Statement
＜Daiwa Securities Group AI Governance Mission Statement＞
Daiwa Securities Group is committed to social issues such as the environment, human rights, education, economic growth, and technological innovation, and contributing to the sustainable development of society and the economy. To achieve this, the use of cutting-edge technology, especially AI, has become essential. While the impact of AI on society and the economy is expected to expand further in the future, there are still developing aspects of AI technology.
Under careful consideration, Daiwa Securities Group has established the "Daiwa Securities Group AI Governance Mission Statement," which we encourage all employees to abide by in understanding that we are a company that uses AI extensively in research and development, prediction and analysis, together with providing services.
Daiwa Securities Group will continue to make every effort to become a trusted partner for all stakeholders and ensure that our services are used with peace of mind.
- 1.Contribution to Society and Economy through AI
While using AI Daiwa Securities Group intends to contribute to a sustainable development of a society and economy by developing full utilization of AI, as well as through dialogue with our diverse stakeholders. Additionally, we will aim to achieve public benefit for a rich society through the utilization of AI Including a sound and sustainable development of finance and capital markets. - 2.Human-Centered AI
Daiwa Securities Group respects human rights and will ensure when using AI it does not violate this principle. We will intervene through our human judgement. - 3.Transparency and Accountability of AI
Daiwa Securities Group values accountability and transparency and will make sure when utilizing AI this value is achieved including a base use that is easy to understand. We will also document, in writing, a commitment to fulfilling this responsibility to the best of our ability. - 4.Appropriate Use and Learning of AI
Daiwa Securities Group uses AI in an appropriate range and manner and strives to ensure that AI is driven from high quality data sources that are pre checked and monitored. - 5.Compliance with Laws and Privacy Protection
Daiwa Securities Group complies with regulatory requirements in the development and utilization of AI. This includes privacy protection. - 6.Security and Monitoring of AI
Daiwa Securities Group takes appropriate security measures and monitors AI systems to prevent malicious attacks such as data breaches. - 7.Governance and Literacy Improvement of AI
Daiwa Securities Group is establishing a governance and control system to check and manage AI appropriately, this includes affects by third parties. As a company that will use AI extensively, we strive to improve AI literacy, promote sound AI business and AI utilization throughout the organization.
Established June 23, 2023
Revised September 1, 2024
Digital Strategy
The Daiwa Securities Group has positioned digital innovation at the core of its management strategy in order to realize the "maximization of client asset value." We leverage data utilization and AI to deliver sophisticated analysis and proposals to a broad range of clients, from high-net-worth individuals to those in the asset-building stage, as we advance the transition to an asset management-oriented business model.
By strengthening our AI contact center and digital channels, we are simultaneously enhancing the client experience and improving operational efficiency, while also working to create new services utilizing generative AI and data infrastructure. Furthermore, through the use of cutting-edge technologies such as blockchain and collaboration with external partners, we are driving the creation of non-linear value.
To sustain these initiatives over the long term, we place great importance on balancing value creation with risk management in our use of AI, as we work toward the realization of our digital strategy.
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