Banking News

AI & ML Set to Revolutionise Banking – BIS

(17 March 2022 – Europe) Banks are increasingly exploring opportunities for using Artificial Intelligence (AI) and Machine Learning (ML) as the technology is expected to increase banks' operational efficiency and facilitate improvements in risk management, the Bank for International Settlements (BIS) reports.

While significant opportunities are emerging from the increasing use of AI & ML in many areas of banking, there are also risks and challenges associated with these methods. Banks are still in the process of developing best practices for risk management and given the increasing adoption of the technology as well as the potential risks, the BIS is analysing banks' use of AI & ML and potential implications for bank supervision.

“The BIS believes that the rapid evolution and use of AI and ML by banks warrant more discussions on the supervisory implications, which will be facilitated by continued sharing of experiences among supervisors, industry and subject matter experts. Given the challenges associated with AI/ML, both supervisors and banks are assessing existing risk management and governance practices to determine whether roles and responsibilities for identifying and managing risks remain sufficient” the BIS said in a statement.

“As with other complex operations and technologies, it is important that banks have appropriately skilled staff, which can include model developers, model validators, model users and independent auditors.”