The Swiss Financial Market Supervisory Authority FINMA publishes its advice on governance and risk management when using artificial intelligence (AI).
The guidelines draw attention to the risks associated with the use of AI and describe FINMA’s observations from continuous monitoring.
The rapid adoption of AI in finance comes with associated risks, which are often difficult to assess. These include operational risks, in particular model risks (e.g. lack of robustness, accuracy, explainability or bias), data risks (e.g. data security, quality of data, data availability), IT and cyber risks, as well as increasing dependencies on third parties. as well as legal and reputational risks.
In the course of its supervisory activities, FINMA has noted that most financial institutions are still in the early stages of development and that the corresponding governance and risk management structures are still being established. In this context, FINMA draws the attention of regulated entities to the need to appropriately identify, assess, manage and monitor the risks resulting from the adoption of AI. It also provides information on the corresponding measurements it observed during continuous monitoring.
The objective is to strengthen the reputation of the financial center and to help institutions sustainably protect their business models against risks in a constantly changing environment by investing in a clear commercial strategy, a strong risk culture and governance as well as as proactive risk management.
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