- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Kyle Brasseur2023-12-08T17:54:00
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.”
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Acting Comptroller of the Currency Michael Hsu argued banks should adopt a “strong sense of fairness” to bolster the effectiveness of their compliance programs, particularly regarding lending decisions guided by AI and machine learning tools.
Acting Comptroller of the Currency Michael Hsu said federal banking agencies are considering enhancements to their operational resiliency requirements for member banks.
The Office of the Comptroller of the Currency proposed eliminating expedited or streamlined reviews of mergers for national banks and federal savings associations.
The U.S. Department of the Treasury’s Financial Crimes Enforcement Network issued an alert to financial institutions about their obligations to report deepfakes, warning artificial intelligence has given bad actors additional tools in their arsenal.
A nationwide rental outlet affiliated with Rent-a-Center and its chief executive have been sued by the Consumer Financial Protection Bureau for allegedly deceiving five million consumers about the terms of credit agreements.
A lack of risk visibility is causing companies to reject customers–and potentially lose money–over fears they might be in danger of violating rules around anti-money laundering and sanctions regulations.
