As part of our Technology Marathon webinar series, partners Kristin Lee, Mike Pierides, and Steven Stone recently discussed financial regulators’ increasing focus on artificial intelligence (AI).
We have published a summary of the key takeaways from the webinar, which include the following:
- Most, if not all, financial services firms will have some form of AI embedded in their supply chain of software and services
- Spending on AI solutions is likely to increase significantly
- Financial entities and their service providers should be familiar with the existing regulatory expectations around technology and third-party risk management, as well as the numerous AI-specific publications, each of which may impact arrangements between third-party AI vendors and financial entities
- Regulators expect financial entities to have in place appropriate controls, policies and procedures, and surveillance and monitoring to comply with existing regimes, including ensuring prudent operational risk management
- In some cases, financial entities may act as AI providers, where AI is used in their services, and this will impact how the regulations will fall, the contractual positions they take with customers, and the policies and procedures they must have in place
- Firms that are grappling with developing AI-specific policies and procedures should take a holistic approach and consider what policies and procedures they already have in place covering the procurement and use of AI