Lecture series
AI governance in financial services
What artificial intelligence is used for in financial services and why it needs governance, the international principles for responsible AI, how model risk management extends to AI, the new questions raised by generative AI and outside providers, and how a lender can organise roles, risk tiers and human oversight. Five lessons, at the level of principles.
5 of 5 lessons published. Lesson 1 is free to read.
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- 01AI in financial services: what it is used for and why it needs governanceFinancial institutions use artificial intelligence in fraud checks, customer service and credit decisions. According to a paper from the Bank for International Settlements, its risks are mostly familiar ones, some of them made larger. Governance is how a firm decides which uses to allow, who answers for them and how they are checked.
- 02Principles for responsible AI: the OECD, ASEAN and Singapore's FEATBefore rules, there were principles. The OECD, ASEAN and the Monetary Authority of Singapore have each set out what responsible AI means. They agree on most points. ASEAN and MAS both expect firms to match the strength of their controls to the harm a system could do, and the OECD asks for a systematic approach to managing risk.
- 03AI and model risk management: inventory, validation and monitoringSupervisors in the United States, the United Kingdom and Canada expect AI models that fall under their model risk guidance to be governed like any other model: listed in an inventory, rated by risk, checked by people who did not build them, and monitored while they run. What AI changes is how hard some of these steps become.
- 04Generative AI and outside providers: new uses, new risksGenerative AI writes text, summarises documents and answers questions. It brings a new kind of error, answers that are confident but false, and it usually comes from a small number of outside providers. The Financial Stability Board states that a financial institution remains accountable for services it obtains from outside providers, and ASEAN's guide places the primary responsibility for managing the risks on organisations that develop and deploy generative AI.
- 05Building AI governance in a lender: roles, risk tiers, human oversight and reportingGovernance turns principles into decisions: who in a lender answers for AI, how each use is placed in a risk tier, what makes human oversight real rather than a formality, and what the board, staff and customers are told. The Basel Committee's principles for bank governance and ASEAN's guide on AI give the frame.
Quiz and certificate 8 questions; those on lesson 1 are free to try. Read every published lesson and score 80% or more for a certificate of completion.
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