The Financial Stability Board’s draft list of 12 recommendations to guide the adoption of artificial intelligence by financial institutions is useful, but the document could use some further tweaks to make the recommendations even more effective, the American Bankers Association said in a letter to the FSB.
Outlined in a June consultation report, the FSB’s sound practices seek to help board members and senior management at financial institutions as they consider AI adoption. ABA’s AI Working Group – which consists of representatives from banks of all sizes – examined the document and concluded it takes a proportionate, outcomes-focused approach.
“ABA encourages the U.S. banking agencies to consider the FSB’s sound practices as a helpful input into their ongoing AI-related guidance, supervisory and policymaking efforts,” the association said in its letter.
Still, ABA had several recommendations for improving the list. For example, the definition of “machine learning” could be improved and expanded. The association also offered several case studies from community banks that could be incorporated into the document. Finally, ABA suggested that the list of sound practices be reorganized and consolidated to aid its crystallization and application at banks of all sizes.
“While there are several areas in which it can be improved, the consultation report as it stands is very much a solid foundation,” ABA said.
