OCC risk report homes in on AI challenges to banking

Artificial intelligence (AI) was highlighted as an emerging risk to the federal banking system by the Treasury Department’s Office of the Comptroller of the Currency (OCC).

The OCC’s risk perspective for fall 2023, published Thursday, included a section dedicated to the impact AI could have on the banking space, both positive and negative.

“The potential for further benefits as AI gains more widespread adoption could be significant,” the report said. “Developments in the technology may reduce costs and increase efficiencies; improve products, services, and performance; strengthen risk management and controls; and expand access to credit and other banking services. Widespread adoption of AI, however, may also present significant challenges relating to compliance risk, credit risk, reputation risk, and operational risk.”