Banking; Regulatory Technology · near ·
US Banking Increasingly Treating AI Model Risk Management As Regulatory Due Diligence
US financial regulators, including the Fed and SEC, are introducing a revised model-risk framework that will explicitly incorporate AI, including detailed control objectives for bias testing, validation, and explainability. This will create a new compliance burden and also an opportunity for specialist AI compliance solutions, as financial institutions will need to demonstrate adherence to fair lending laws when deploying AI in critical functions.
Part of the Financial Services Opportunity Outlook, Korim's monthly analysis of emerging opportunities in this sector.