Governance, Risk, and Responsible AI Practices

Through the rapid growth of Artificial Intelligence (AI) and its related technologies and applications, the potential benefits are significant. Yet, without a robust governance structure, the risks are also considerable. AI has become the most prominent area of technology risk in stakeholder surveys of financial services companies, and AI regulation is on the rise throughout the world. Therefore, organisations must implement an appropriate risk governance framework that reflects the scale, complexity, and maturity of AI applications and their associated risks. Risk frameworks that encompass the fundamentals of Good Governance, are supported by the right principles in place, and establish responsible practices that consider the ethical and social impact of AI systems, will enhance the work of AI and enable the potential value from it to be maximised.

Good Governance encompasses the traditional pillars of fairness, accountability, and transparency, supplemented by ethics, and involves responsible AI practices that interpret, communicate, and consider the ethical implications of AI operations. Good Governance should be supported by appropriate data governance policy and practice, as well as compliance with relevant regulatory requirements. Primary stakeholders, the people, and customers of the organisation, need to be at the heart of AI operations. Their trust and security must come first, and risk frameworks that go beyond compliance are required to achieve this. For Financial Services institutions in particular, Brand and Reputation Management is paramount.