Dive Brief:
- A focus on governance and responsible AI use is growing as banking firms accelerate AI use, according to Evident’s annual report on 50 of the largest global financial firms published Tuesday. All but one bank surveyed said they have responsible AI principles in place, up from 16 banks in 2023.
- More than two-thirds said they have additional detailed controls for AI systems, including checks on what they are fed and what they produce, limits on the tools they can use and oversight once they are live.
- “Leading banks define standardized guardrails, permissions, evaluation protocols, monitoring requirements and escalation mechanisms once, then embed them directly into enterprise AI platforms and architectures,” Alexandra Mousavizadeh, co-founder and co-CEO of Evident, told CIO Dive in an email.
Dive Insight:
To support their AI use cases, banks are rapidly adding specialized talent, focusing resources on enabling the employees who use it and shoring up the controls that keep information safe.
Banks advanced their AI use about three times faster last year than the previous three, as they settle into mature AI use. The 50 banks surveyed for the index cited more than 1,100 AI use cases since 2021.
In an assessment of talent, innovation, leadership and transparency, JPMorgan Chase ranked first in Evident’s maturity Index, followed by Capital One, Royal Bank of Canada and CommBank. While public concern mounts over increasingly powerful AI systems, the index’s leading banks have invested in tight controls and solid governance, the report found.
As banks scale AI, they are more focused on deploying AI deeper into workflows than universal adoption, the Evident report found. The number of banks reporting ROI on AI projects was 12, up from eight last year.
Software implementation and advisory tools were some of the AI use cases banks reported as driving value this year. Bank of America, Wells Fargo, Citigroup, BNY, JPMorgan Chase and others have detailed the ways they’re deploying AI throughout their institutions.
AI governance talent across the top 50 banks grew 33% year over year, the Evident report found, as security in the industry remains a priority. Banks are also working to deploy AI in risk mitigation tactics — more than half of banking IT executives expect AI agents to be fully embedded in risk, compliance and audit functions, as well as fraud detection and transaction monitoring, according to Accenture data.
Governance and safety are a top priority of banking tech executives because AI is operating in a highly regulated and high-consequence system built on trust, Mousavizadeh told CIO Dive in an email. The technology can be used to inform decisions about credit, fraud, payments, trading, financial advice, customer data and financial services.
“Errors can therefore translate directly into financial loss, customer harm, regulatory breaches or systemic and reputational risk,” she said.
Banks that are finding time savings from their AI use tend to reinvest that time into clients, products and dealing with a backlog of work, Mousavizadeh said in the report. Banks that scored high in Evident’s index focus on AI in production and its impact, and add talent to make that possible, such as AI scientists, AI product managers, engineers and risk specialists, she added.
