Regulatory agencies, including the CFTC in this Staff Advisory, continue to remind those companies under their purview that the use and deployment of AI solutions does not change a company's responsibility for regulatory compliance. These companies need to be implementing policies and governance processes to ensure that their deployment and use of AI in their organization is risk mitigated and enables them to meet their compliance obligations. Absent these policies and processes, companies…

SEC Chair Gensler continues to focus on the use of AI by financial services firms and the harm that its use can cause to consumers and investors. Financial services firms need to hear his words of caution and ensure that they have strong AI governance programs in place. These companies need to not only be testing and verifying the AI platforms and their output at development and implementation, but periodically over time to ensure that the platforms continue to perform as expected and have…

The Working Group highlights a consistent theme from federal regulators that current laws and regulations continue to apply to companies that use and deploy AI solutions. The use of AI solutions and the reliance on third party solutions was also of particular focus. It will require smaller companies to ensure their due diligence and to review contractual terms with those third parties to provide the necessary regulatory support. 

Cloud adoption has expanded, and continues to expand, rapidly in all sectors.  However, many companies, especially in the financial services sector have struggled to match the commitments from the cloud service providers to the regulatory requirements imposed on those companies. This has especially been an issue for medium to small financial services companies that do not have the spend, nor the leverage, to obtain bespoke solutions and contract terms from the large cloud service…