Regulators Propose Audit-Ready Controls to Govern AI
Regulators Propose Audit-Ready Controls to Govern AI
Publish Date: 2026-04-06 09:29:00
Source Domain: www.pymnts.com
- Regulators are intensifying scrutiny on financial institutions’ use of artificial intelligence in functions like fraud detection, credit underwriting, and anti-money laundering.
- The U.S. Treasury recently introduced the Financial Services AI Risk Management Framework (FS AI RMF) for documenting AI governance, and an AI Lexicon to standardize terminology across different sectors.
- The framework provides a tested structure for banks to document details of their AI systems, including ownership, bias testing, performance tracking, and escalation procedures, which regulators expect to see.
- For FinTechs and payments companies relying on third-party AI vendors, the OECD’s Due Diligence Guidance for Responsible AI stresses that governance obligations do not transfer to the vendors.
- The European Union’s AI Act has specific accountability requirements for providers of general-purpose AI models, such as risk assessments and cybersecurity protocols.
- The regulatory trend across the globe is increasingly focused on accountability and responsibility throughout the AI supply chain, both within institutions and throughout third-party vendor relationships.
