Finance has become one of the most globalized and digitized sectors of the economy. It is also one of the most regulated of sectors, especially since the 2008 Global Financial Crisis. Globalization, digitization and money are propelling AI in finance forward at an ever increasing pace.
In the context of finance, the post-Crisis focus on personal and managerial responsibility systems provide a unique and important external framework to enhance internal responsibility in the context of AI, by putting a human in the loop through regulatory responsibility, augmented in some cases with AI review panels. This approach – AI-tailored manager responsibility frameworks, augmented in some cases by independent AI review committees, as enhancements to the traditional three lines of defense – is in our view likely to be the most effective means for addressing AI-related issues not only in finance – particularly “black box” problems – but potentially in any regulated industry.