Financial Stability and Regulatory Compliance / Risk Management Practices / Technology Innovations
FINANCIAL INNOVATION SERIES:
Artificial Intelligence and Machine Learning: A Model Risk Management Perspective
Alexey Rubtsov, PhD, Senior Research Associate, Global Risk Institute
The last decade has witnessed a large-scale adoption of Artificial Intelligence and Machine Learning (AI/ML) models in the financial sector. Although there are many benefits that AI/ML can bring to financial services (e.g., higher accuracy, automation), it can also amplify existing risks and introduce new ones.
Financial regulators around the world are currently working on regulatory requirements that AI/ML models should meet when applied by financial institutions. In this report we explore some of the most recent and exciting developments in AI/ML model risk management.