March 31 -- The Board of Governors of the Federal Reserve System, Bureau of Consumer Financial Protection, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency (agencies) are gathering information and comments by June 1, 2021 on financial institutions' use of artificial intelligence (AI), including machine learning (ML).
The purpose of this request for information (RFI) is to understand respondents' views on the use of AI by financial institutions in their provision of services to customers and for other business or operational purposes; appropriate governance, risk management, and controls over AI; and any challenges in developing, adopting, and managing AI. The RFI also solicits respondents' views on the use of AI in financial services to assist in determining whether any clarifications from the agencies would be helpful for financial institutions' use of AI in a safe and sound manner and in compliance with applicable laws and regulations, including those related to consumer protection.
The agencies support responsible innovation by financial institutions that includes the identification and management of risks associated with the use of new technologies and techniques. With appropriate governance, risk management, and compliance management, financial institutions' use of innovative technologies and techniques, such as those involving AI, has the potential to augment business decision-making, and enhance services available to consumers and businesses. The Appendix of this RFI includes a non-comprehensive list of laws, regulations, and other agency issuances that may be relevant to the use of AI approaches by agency-supervised institutions. Financial institutions are exploring AI-based applications in a variety of fields. Uses of AI by financial institutions include (but are not limited to): flagging unusual transactions, personalization of customer services, credit decisions, risk management, textual analysis, and cybersecurity.
AI has the potential to offer improved efficiency, enhanced performance, and cost reduction for financial institutions, as well as benefits to consumers and businesses. AI can identify relationships among variables that are not intuitive or not revealed by more traditional techniques. AI can better process certain forms of information, such as text, that may be impractical or difficult to process using traditional techniques. AI also facilitates processing significantly large and detailed datasets, both structured and unstructured, by identifying patterns or correlations that would be impracticable to ascertain otherwise. Other potential AI benefits include more accurate, lower-cost, and faster underwriting, as well as expanded credit access for consumers and small businesses that may not have obtained credit under traditional credit underwriting approaches. AI applications may also enhance an institution's ability to provide products and services with greater customization.
It is important for financial institutions to have processes in place for identifying and managing potential risks associated with AI, as they do for any process, tool, or model employed. AI may present particular risk management challenges to financial institutions in the areas of explainability, data usage, and dynamic updating.
The agencies recognize that AI has the potential to offer improved efficiency, enhanced performance, and cost reduction for financial institutions, as well as benefits to consumers and businesses. In this RFI, the agencies are seeking information on financial institutions' risk management practices related to the use of AI; barriers or challenges facing financial institutions when developing, adopting, and managing AI and its risks; and benefits to financial institutions and their customers from the use of AI. The RFI also solicits respondents' views on the use of AI in financial services, which will help the agencies determine whether any clarification would be helpful for financial institutions' use of AI in a safe and sound manner and in compliance with applicable laws and regulations, including those related to consumer protection.
FR notice of RFI: https://www.federalregister.gov/documents/2021/03/31/2021-06607/request-for-information-and-comment-on-financial-institutions-use-of-artificial-intelligence