There Is A Lack Of Transparency Among Banks Regarding Their Use Of AI

The Artificial Intelligence (AI) development of the world’s largest banks needs more transparency. A study analyzed the development of AI in 23 major banks across the US, Europe, and Canada. The study revealed that eight banks failed to disclose their responsible AI principles.

Evident, a benchmarking company, evaluated banks in four responsible AI areas using public data to build its AI Index. The assessment examined the banks’ establishment of AI leadership roles, partnerships with other organizations, ethical principles publication, and original research publication.

According to Evident’s CEO, Alexandra Mousavizadeh, AI could improve risk management and decision-making in the banking sector. However, he emphasized that banks must develop AI to uphold ethical standards and mitigate unforeseen consequences.

Banks Already Employ AI

Banks presently employ AI to analyze data faster than humans, authenticate clients, and risk modeling. However, as per Mousavizadeh, the absence of responsible AI reporting standards and banks’ reluctance to share their efforts creates a problem. To demonstrate leadership, banks must publicly report their AI progress. This is especially true given the recent issues faced by Silicon Valley Bank and Credit Suisse.

Mousavizadeh stated that their study revealed an alarming lack of transparency regarding current and future AI usage. Potentially, this lack of transparency could harm stakeholder trust and stifle progress. Despite being a highly regulated sector, several institutions are already taking proactive measures to address AI concerns. Many are now developing internal programs for responsible AI.

Result Of The Evident Research

Evident’s research showed that European banks were the least transparent regarding responsible AI policies. According to the report, only JPMorgan Chase, Toronto-Dominion Bank, and Royal Bank of Canada were found to have a clear strategic focus on transparency in responsible AI. These banks demonstrated evidence of creating specific responsible AI leadership roles, publishing ethical principles and reports on AI, and collaborating with relevant universities.

According to the report, North American and European banks differ in how they choose their AI teams. North American banks typically hire specific responsible AI roles, usually from Big Tech firms. Meanwhile, European banks often integrate responsible AI into their data ethics teams.

Annabel Ayles, Evident’s co-founder, remarked about European banks. According to her, given the predominance of General Data Protection Regulation legislation, European banks view responsible AI through a data ethics perspective. However, they may be missing out by not developing AI-specific roles and taking a holistic approach to broader AI risks.

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