FINMA guidance on governance and risk management when using artificial intelligence
The Swiss Financial Market Supervisory Authority FINMA is today
publishing its guidance on governance and risk management when using
artificial intelligence (AI). The guidance draws attention to the
risks associated with the use of AI and describes FINMA’s observations
from ongoing supervision.
The rapid adoption of AI in finance
brings with it associated risks, which are often difficult to assess.
These include operational risks, in particular model risks (e. g. lack
of robustness, correctness, explainability or bias), data-related
risks (e. g. data security, data quality, data availability), IT and
cyber risks, increasing third-party dependencies as well as legal and
reputational risks.
In the course of its supervisory
activities, FINMA has observed 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 is drawing the supervised institutions’
attention to the need for appropriate identification, assessment,
management and monitoring of the risks resulting from the adoption of
AI. It is also providing information on corresponding measures that it
has observed in the course of ongoing supervision.
This is
intended to strengthen the reputation of the financial centre and help
institutions to sustainably protect their business models against
risks in a constantly changing environment by investing in a clear
business strategy, a strong risk culture and governance plus proactive
risk management.