As the financial services industry increasingly turns to the use of artificial intelligence (AI) and machine learning (ML) for a variety of key functions—from underwriting to fraud or risk detection—many institutions grapple with establishing a governance model to manage the new risks posed by such systems. As financial services companies, from banks to asset manager to insurance companies, begin adopting AI/ML systems, they will need to tailor their existing policies to address these unique issues. 

Although the solution adopted by each company will be unique to its industry and needs, this Legal Update—originally published by Corporate Compliance Insights—outlines the key areas for model risk management changes to address AI/ML challenges.