The Conference of State Bank Supervisors (CSBS) has released a new supervisory resource about using artificial intelligence.
The new framework will help state examiners assess the uses of and risks of AI at state-chartered banks and state-licensed nonbank financial institutions, and provide clarity to financial institutions about what a state examiner may request in reference to an institution’s AI-based products, services and tools.
“The use of AI provides a powerful new tool for financial institutions to improve services, protect consumers, and increase operating efficiency. While any new technology can present risks, the CSBS AI Supervisory Framework provides a principles-based approach to governance intended to help financial institutions explore and implement AI with additional confidence,” CSBS President and CEO Brandon Milhorn said.
The guidance, the CSBS AI Supervisory Framework, is based on leading AI risk management resources, and will give state examiners a tool that will help identify and understand AI within financial institutions and assess the associated risks. The framework will also help examiners determined when deeper reviews are warranted.
Officials said the framework also doubles as a resource for industry and will allow financial institutions to use the framework as a way to assess their own AI programs, establish sound AI governance and risk management, and prepare for examinations.
It will be up to each state agency to determine the extent to which the framework is used in their supervisory programs.