Artificial Intelligence (AI) will separate winning banks from losers. This was said by 77% of banking executives surveyed during COVID-19.
The pandemic will intensify the use of AI, making effective governance more urgent.
According to the Economist Intelligence Unit (EIU) report, data bias, “black box” risk and lack of human oversight are the main governance issues for banks using AI.
This independent global review consolidates findings from 25 regulatory reports to provide deep insights and guidance on the use of AI in banking.
The report highlights that AI is a top priority for technology investment for banks and reveals that 77% of banking executives believe that AI will separate winning from losing banks.
“AI is seen as a key competitive differentiator in the sector. Our new study, drawing on the guidance given by regulators around the world, highlights the key governance challenges banks must address if they are to capitalise on the AI opportunity safely and ethically” says Pete Swabey, Editorial Director EMEA – Thought Leadership, The Economist Intelligence Unit.
AI is expected to retain its importance after the pandemic as banks look to new technologies to help them adapt to changing customer needs and compete with new market entrants.
The EIU report reveals that ensuring ethical, fair and well-documented AI-based decisions will be vital for banks deploying AI technology.
The report highlights key governance challenges and distils regulatory guidance for banks using AI, including:
- Ethics and fairness: banks must develop AI models that are ‘ethical by design’. AI use cases and decisions should be monitored and reviewed and data sources regularly evaluated to ensure that data remains representative.
- Explainability and traceability: steps taken to develop AI models must be documented in order to fully explain AI-based decisions to the individuals they impact.
- Data quality: bank-wide data governance standards must be established and applied to ensure data accuracy and integrity and avoid bias.
- Skills: banks must ensure the right level of AI expertise across the business in order to build and maintain AI models, as well as oversee these models.