In Regulatory Wrap for the week to February 20, Rob Mason unpacks the main takeaways from the BoE’s recent roundtables on AI integration in financial services.
In this week’s Regulatory Wrap, we examine emerging questions from the Bank of England’s (BoE) recent roundtables, which discussed one of the biggest “known unknowns” for the financial industry – the impacts of AI. The roundtable explores how firms and regulators can best balance AI innovation, risk, and uncertainty.
1. The BoE found that there are concerns for compliance teams, namely those in second line functions, that could be delaying wider AI adoption – especially in monitoring workflows
2. Some concerns stem from lacking regulatory frameworks around AI, although regulators must consider that overly prescriptive guidance could slow adoption as well
3. Model validation emerged as another area of focus, with attendees sharing concerns that the speed of AI innovation could outgrow legacy validation approaches
4. Attendees urged the BoE to share examples of what good and bad practices may look like, praising current outcomes-based AI frameworks on balancing regulation and innovation
5. The bottom line is proactivity: regulators are expected to continue working with the industry to provide clearer guidance, and firms are expected to utilize robust and validated AI solutions
This week’s Regulatory Wrap is brought to you by Global Relay’s Director of Regulatory Intelligence, Rob Mason.
As regulators clarify guidance and develop best practices around AI use, firms can stay ahead of the curve by working with partners that provide comprehensive, trained, and trusted AI solutions.
