The Financial Stability Board today finalized a list of 12 sound practices to guide the adoption of artificial intelligence by banks and other financial institutions.
FSB first proposed the list in June to help board members and senior management at financial institutions as they consider business strategy, technology adoption and risk management in an AI environment. They are meant to serve as “a practical toolkit that financial institutions can tailor to their specific context and risk profile and integrate into existing frameworks, including those for cyber and third-party risk,” the board said in a statement.
The finalized principles can be lumped into two groups, according to FSB. The first set emphasizes the importance of organization-wide AI governance as financial institutions adopt the technology. The second set establishes a comprehensive framework for managing risks throughout the AI lifecycle, from AI development to deployment.
The American Bankers Association in July offered several recommendations for how to improve the then-draft list. For example, the definition of “machine learning” could be improved and expanded, ABA said. The association also provided several case studies from community banks that could be incorporated into the document, and it suggested that the list of sound practices be reorganized and consolidated to aid its crystallization and application at banks of all sizes.
