While AI is not necessarily a new technology, the acceleration of its capabilities creates new opportunities for these tools. Regulators and companies should both focus on the use of these tools and the good they can create and harm they can cause. As the Associations note, there are numerous laws and regulations already on the books that are applicable to the improper use of the AI tools. Any new regulation framework developed should focus on the potential that is not already addressed by…

A consistent message is being delivered to companies – make sure that you have the internal controls, governance programs and process in place as you move forward with your AI initiatives. Each AI use case will be different, and companies need to be ready to assess each AI use case, determine the attendant risk and implement oversight processes to mitigate and manage these risks. This extends not only into the technology and compliance functions of the company, but the marketing,…

While the CRS report provides a good overview of many of the predominant uses cases for AI/ML in the financial services sector, and identifies many of the policy debates regarding its use, there is significant uncertainty as to whether Congress and the regulators will enact any new legislation or guidance in the near term. Financial service companies are going to move forward with the adoption and implementation of AI/ML throughout their businesses – the benefits are just too great. These…

Regulators are expressing their concern about the deployment and use of artificial intelligence by those companies over which they have authority.

Companies need to be prepared and transparent when responding to regulators’ concerns. To prepare for increased scrutiny, companies should ensure they inventory AI across their organization. They should identify the use cases that are most likely to expose the company to risk, anticipating what would be of interest to the regulators.…