UK Government’s White Paper Addresses the Challenges in AI
The new white paper published by the UK government to guide the use of AI for responsible innovation places a welcome focus on responsible AI. The five principles outlined for regulators to follow to best facilitate the safe and innovative use of AI are all crucial elements which support customers’ experiences, and outcomes, at every step of their journeys.
“Even though there has been a growth in demand for AI-driven financial products and offerings, many financial services firms have yet to develop and hold themselves accountable to Responsible AI standards,” said Scott Zoldi, Chief Analytics Officer at FICO, who recently blogged about ChatGPT. “Beyond fulfilling an ethical responsibility to their customers, implementing standards for Responsible AI that is explainable, auditable, and ethical helps to improve brand loyalty, reduces reputational risks, and better enables regulatory standards to be met.”
FICO released its third annual State of Responsible AI in Financial Services report earlier this year, developed in collaboration with market intelligence firm Corinium. The findings show that the understanding of responsibility when it comes to the use of AI is maturing.
However, more needs to be done to ensure the ethical use of AI by financial firms. As AI strategies mature, more companies are expanding their use of AI beyond centers of excellence. At the same time, partnerships with vendors are making advanced AI capabilities accessible to companies of all sizes.
FICO Corinium Report Highlights:
- 52% of financial services organizations say AI initiatives are a higher priority than 12 months ago.
- Only 8% of respondents report that their AI strategies are fully mature with model development standards consistently scaled.
- 43% of organizations say they struggle with AI governance structures to meet regulatory requirements.
- 71% of organizations state that AI Ethics and Responsible AI are not yet a core part of their operational strategies.
The FICO-sponsored report, State of Responsible AI in Financial Services, can be downloaded here.
Defining Responsible AI
Firms that undertake the process of defining Responsible AI involve leadership in aligning on a codified strategy to demonstrate how ethical AI and AI governance will be enforced in their business. However, this process remains elusive; only 44% have sufficiently defined standards for Responsible AI at the board level.
Should AI be Explainable or Predictive?
A key component of AI ethics is the ability to explain a decision made by an AI or a machine learning algorithm. This raises a conflict about what’s most important in an AI algorithm – its predictive power, or the extent to which you can explain why it came to that conclusion. In business, explainability is key to determining bias and therefore to using AI ethically and responsibly.
Combating AI Model Drift
In total, more than a third of companies surveyed by Corinium said that the governance processes they have in place to monitor and re-tune models to prevent model drift are either ‘very ineffective’ or ‘somewhat ineffective’. A lack of monitoring to measure the impact of models once deployed was a significant barrier to the adoption of responsible AI for 57% of respondents.
“In today’s increasingly AI-fueled world, trust is at a premium, and so is the use of responsible AI,” said Zoldi, who recently commented on America’s AI Bill of Rights. ”Companies, governments and regulators need to make sure AI is used responsibly, which requires an appropriate infrastructure of corporate-defined standards of AI model development and deployment. It also requires a rigorous AI governance framework, in order to demonstrate adherence to established standards and auditable AI.”
People In This Post
Companies In This Post
- Eltropy to Host Webinar on How CFIs Can Set Themselves Up for Success with ChatGPT Read more
- Profile Software Offers Digital and Core Banking as SaaS on AWS Read more
- Truist to Present at the Morgan Stanley US Financials, Payments & CRE Conference Read more
- RIBBIT Acquires ValidiFI, Bolstering Data, Products and Market Presence Read more
- BridgeFT Named a Finalist in Three Categories in the 2023 WealthManagement.com Industry Awards Read more