Central banks need to find a balance between fostering innovation using artificial intelligence and mitigating the different risks the technology may generate, the Bank for International Settlements concluded in a new report on AI adoption by central banks.
The report provides guidance on how central banks can identify and manage risk associated with the adoption of AI models and tools in their organizations, according to BIS. Among its many recommendations, the report proposed 10 actions central banks should consider when adopting AI, such as establishing an interdisciplinary AI committee, defining the principles for responsible AI use and performing a detailed assessment of risks and controls.
“The safe and proper usage of AI across the central bank functions may demand changes to existing risk management and governance frameworks,” the report states. “In this sense, central banks will eventually have to consider a careful review of their current governance structures and risk management practices, while embracing AI models and tools safely and efficiently.”
