Financial news

Banks in North America and Europe are failing to reveal their approaches to responsible artificial intelligence (AI) development; reveals research from Evident, an independent intelligence platform looking to accelerate the successful adoption of AI in business.

The likes of Silicon Valley Bank‘s collapse and growing concerns surrounding Credit Suisse have highlighted issues concerning transparency in the banking sector. Increasing news reports are putting the sector into the spotlight, highlighting the need for banks to overhaul and improve their approach to risk management.

Evident’s AI Index found that, while AI is already used by banks for many critical processes (including authenticating customers and risk modelling) eight of the 23 largest banks in the US, Canada and Europe currently provide no public responsible AI principles.

Evident analysed publicly available data points to assess how banks report against four main areas of responsible AI: the creation of AI leadership roles, publication of ethical principles, collaborations with other organisations, and publication of original research.

Alexandra Mousavizadeh, co-founder and CEO of Evident, commented: “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 minimises 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 programmes 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.”

AI transparency in Canada 

The Evident Index reveals that Canadian banks are the most transparent regarding AI reporting – while European banks are the least transparent.

Only JPMorgan Chase & Co, Royal Bank of Canada, and Toronto-Dominion Bank have a demonstrable strategic focus on transparency around responsible AI. Each showed evidence of creating specific responsible AI leadership roles, publishing ethical principles and reports on AI, and partnering with relevant universities and organisations.

Approaches to hiring AI talent also differ regionally. North American banks are more likely to hire specific responsible AI roles, while European banks tend to lead responsible AI within their data ethics teams.

Annabel Ayles, co-founder of Evident, discussed the findings. Ayles said: “It’s perhaps unsurprising that two Canadian banks, RBC and TD Bank, perform well as the country itself facilitates a lively AI ethics conversation. The top-ranking banks also tend to have strong research hubs, which we believe helps them address the technical challenges of implementing ethical standards into AI.

“It’s similarly clear that banks are trying to work out the links between responsible AI and data ethics. European banks which view responsible AI through a lens of data ethics, potentially due to the dominance of GDPR legislation, are perhaps missing a trick by not creating AI-specific roles and thinking holistically about the broader risks posed by AI.”