Financial regulatory agencies want to know how financial institutions use AI

“A group of federal financial regulators says they know U.S. financial institutions are using artificial intelligence but wants more information on where the technology is being deployed and how those organizations are accounting for the risks involved.

The financial sector is using forms of AI—including machine learning and natural language processing—to automate rote tasks and spot trends humans might miss. But new technologies always carry inherent risks, and AI has those same issues, as well as a host of its own.

On Wednesday, the Board of Governors of the Federal Reserve System, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the National Credit Union Administration and the Office of the Comptroller of the Currency will publish a request for information in the Federal Register seeking feedback on AI uses and risk management in the financial sector…”

“’AI can identify relationships among variables that are not intuitive or not revealed by more traditional techniques,’ the RFI states. ‘AI can better process certain forms of information, such as text, that may be impractical or difficult to process using traditional techniques. AI also facilitates processing significantly large and detailed datasets, both structured and unstructured, by identifying patterns or correlations that would be impracticable to ascertain otherwise.’…”

“The request for information seeks to ‘understand respondents’ views on the use of AI by financial institutions in their provision of services to customers and for other business or operational purposes; appropriate governance, risk management, and controls over AI; and any challenges in developing, adopting, and managing AI.’…”

“The RFI includes 17 detailed questions. Responses are due 60 days after the publish date, or June 30…” Read the full article here.

Source: Regulators Want to Know How Financial Institutions Use AI and How They’re Mitigating Risks – By Aaron Boyd, March 30, 2021. Nextgov.

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