The Financial Stability Institute (FSI) of the Bank for International Settlements (BIS) published a paper that examines the existing policies on governance of artificial intelligence in financial services. The paper examines policy documents on the governance of artificial intelligence, as issued by financial authorities in nine jurisdictions, along with other cross-industry artificial intelligence governance guidance documents that apply to the financial sector; the nine jurisdictions are European Union, France, Germany, Hong Kong, Luxembourg, Netherlands, Singapore, United Kingdom, and United States. After the analysis, the authors conclude that there is scope for financial standard-setting bodies to develop international guidance or standards in this area.
The paper notes that most supervisors are still in early stages of developing artificial-intelligence-specific governance principles or guidance for financial firms. While such high-level guidance can be useful to stand the test of time and be durable enough to apply in a technology-agnostic way, firms would find it useful to have more concrete practical guidance. Most supervisors are working in partnership with industry and other technology stakeholders to develop such guidance. In the absence of concrete practical guidance or supervisory expectations on artificial intelligence governance, some firms are finding it difficult to properly set up safeguards in their artificial intelligence implementations. Authorities’ views on how these common themes should be implemented are still evolving. A continued exchange of views and experiences at the international level could eventually lead to the development of international standards. Such international standards could be helpful particularly to jurisdictions that are just starting their digital transformation journey. They can also serve as a minimum benchmark in guiding orderly deployment of artificial intelligence technologies within the financial sector. As more specific regulatory approaches or supervisory expectations emerge on specific aspects of the artificial intelligence use cases, standard-setting bodies might be in a better position to identify the common best practices that will be useful for other jurisdictions to consider.
Keywords: International, Banking, Artificial Intelligence, Guidance, Regtech, Fintech, Modelling Risk, Governance, Lending, Basel, BIS, FSI
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