Banks lack transparency over their use of AI
Banks across North America and Europe are failing to publicly report on their approaches to responsible AI development, according to new research from Evident.
While AI is already used by banks for many critical processes, from authenticating customers to risk modeling, eight of the 23 largest banks in the US, Canada and Europe currently provide no public responsible AI principles.
Recent events like the collapse of SVB and concerns about Credit Suisse have shone a spotlight on banking sector transparency and the need to improve their approach to risk management.
Evident analyzed millions of publicly available data points to assess how banks report against four main areas of responsible AI: creation of AI leadership roles, publication of ethical principles, collaborations with other organizations, and publication of original research.
It finds that Canadian banks are most transparent on responsible AI reporting, with European banks the least. Only three banks -- JPMorgan Chase & Co, Royal Bank of Canada, and Toronto-Dominion Bank -- have a demonstrable strategic focus on transparency around responsible AI. Each shows evidence of creating specific responsible AI leadership roles, publishing ethical principles and reports on AI, and partnering with relevant universities and organizations.
Alexandra Mousavizadeh, Evident's co-founder and CEO, says:
AI could be the key driver of better risk management and decision-making across the global banking sector. However, it is vital that banks develop AI in a way that meets high ethical standards and minimizes unforeseen consequences. Our research found a worrying lack of transparency around how AI is already used -- and how it may be used in the future -- which could damage stakeholder trust and stifle progress.
In this highly regulated sector, the reality is that many institutions are taking proactive steps to address AI concerns and developing internal programs to address responsible AI. The problem is that there is no standard for responsible AI reporting, and many banks withhold the details of their efforts. At this critical time for the sector, the banks need to show leadership and start reporting publicly on their AI progress.
There are differences to the approach to hiring AI talent too. North American banks are more likely to hire specific responsible AI roles, usually from big tech firms, whereas European banks tend to lead responsible AI within their data ethics teams.
You can see the full index on the Evident site and there's an overview in the infographic below.