Artificial Intelligence in Finance requires specific safeguards: OSFI and GRI report - Explainability among key principles for gaining confidence in AI

TORONTO, April 17, 2023 /CNW/ - The Office of the Superintendent of Financial Institutions (OSFI) and the Global Risk Institute (GRI) today jointly released a report on the ethical, legal, and financial implications of artificial intelligence (AI) on financial services institutions.

The partnership between OSFI and GRI created the Financial Industry Forum on Artificial Intelligence (FIFAI) which gathered Canada's financial services experts from industry, government and academia on the application of AI. The rapid growth in digitalization and usage of AI across the financial services industry highlighted how current AI risk management frameworks must adapt to remain relevant, forward-looking, and responsive to industry needs. As the use of AI technologies continues to evolve, the need for guiding principles became apparent. The FIFAI discussions then led to the development of the EDGE principles,  Explainability, Data, Governance and Ethics: 

• Explainability enables customers and relevant stakeholders to understand how an AI model arrives at its conclusions.
• Data leveraged by AI allows financial institutions to provide targeted and tailored products and services to their customers or stakeholders. It also improves fraud detection, enhances risk analysis and management, boosts operational efficiency, and improves decision making.
• Governance ensures a framework is in place that promotes a culture of responsibility and accountability around the use of AI in an organization.
• Ethics encourages financial institutions to consider the broader societal impacts of their AI systems.

Quote  

"Recent advances in machine learning represent a great opportunity for financial organizations. However, balancing regulation and innovation is essential. While it is important to ensure financial institutions remain competitive by responsibly leveraging these innovations, the financial stability of our system and its fairness to those who use it are of the upmost importance."

-  Peter Routledge, Superintendent of Financial Institutions  

"AI applications will develop in scope and scale, so guardrails are needed to ensure the benefits of AI continue to be realized while the risks are prevented or mitigated. A robust risk management approach is critical to securing the public's confidence in Canada's financial services sector and its use of AI."

-  Sonia Baxendale, President and Chief Executive Officer, GRI

Quick Facts

• OSFI and GRI convened a community of AI thought leaders to establish the Financial Industry Forum on Artificial Intelligence: A Canadian Perspective on Responsible AI. Experts from industry, government and academia convened to advance the conversation around safeguards and risk management in the use of Artificial Intelligence and machine learning in financial institutions.
• The outcome of these important conversations has been synthesized into a report and will serve as a vital resource for the Canadian financial industry in determining how to responsibly leverage AI technology.

Associated Links

• Report: The ethical, legal, and financial implications of artificial intelligence (AI) on financial services institutions

About OSFI: The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks. OSFI supervises more than 400 federally regulated financial institutions and 1,200 pension plans to determine whether they are in sound financial condition and meeting their prudential requirements. 

About GRI: The Global Risk Institute in Financial Services (GRI) is a premier organization that defines thought leadership in risk management for the financial services sector. We bring together leaders from industry, academia and government to draw actional insights on risks globally. We are a non-profit, public and private partnership with 45 government and corporate members from asset management, banking, credit unions, insurance and pension management. Our goal is to be a critical resource to government and the financial industry to mitigate and adapt to risks focused on ensuring the stability of the financial ecosystem.

SOURCE Office of the Superintendent of Financial Institutions

Media contacts: Nancy Tibbo, Director, Marketing & Communications, Global Risk Institute, Email: [email protected], Tel: [phone]; Graeme Harris, Public Affairs Advisor, Global Risk Institute, Email: [email protected], Tel: [phone]; OSFI - Media Relations, Email: [email protected], Tel : [phone]