Generative AI is poised to revolutionize the financial services world. That might be why one of the most popular sessions at COMPLYConnect 2023 turned out to be a session that focused on generative artificial intelligence (AI) and ChatGPT at financial firms.
With its ability to generate reports, analyze documents, identify patterns and more, your firm might be considering implementing generative AI into its processes. But for compliance teams, the question isn’t “if” to adopt generative AI but “how” to do it without tripping compliance wires.
Top five considerations in introducing generative AI at your firm
Here’s a roadmap to navigate the complexities of introducing generative AI in financial services while keeping your firm, clients and investors safe.
1. Create policies and procedures.
Before setting sail with AI, equip your firm with a robust policy framework. These policies should cover how the data may be used, specify data collection methods, storage practices and access controls to comply with privacy regulations. Not only that but your firm’s policies and procedures should provide clear guidelines for interpreting AI outputs and minimizing algorithmic bias that could disadvantage specific groups. Additionally, your compliance team should establish protocols for human review and validation of AI-generated reports and decisions.
2. Build ethical generative AI with strong foundations to avoid bias data and unfairness.
Generative AI systems are only as unbiased as the data that trains them. This means that if your firm is creating or using a generative AI system, there must be a process in place to ensure that it generates fair and equitable outcomes (in financial decision-making, etc.).
Therefore, to avoid biased data and unfairness, your firm should train your generative AI system using diverse data sets and implement bias detection algorithms to prevent discriminatory outcomes. Additionally, your firm should maintain clear audit trails to track AI performance and address potential issues.
3. Secure the data.
Data is the fuel that drives generative AI – secure it fiercely. Implement robust data security measures and encryption protocols to safeguard sensitive information. Additionally, continuously monitor the generative AI system to prevent instances of unauthorized access and misuse of data. Be proactive. Prepare for cyber threats and unexpected events with comprehensive data backup and recovery plans.
4. Foster collaboration and transparency across your firm.
Information silos can create risks for your firm. Eliminate them and establish open communication channels. Introducing any technology to your firm will require interdepartmental involvement and that’s still the case with generative AI. Your compliance team should collaborate with IT and legal teams to ensure compliance and ethical alignment.
This transparency and communication also extends beyond your firm. Inform stakeholders about your responsible generative AI practices and how they benefit everyone and ensure that your compliance team has access to an information trail of your firm’s generative AI use so that information can be provided to regulators if need be.
5. Require that employees complete training.
Educate your employees on the policies and procedures that address generative AI. Equip your team with the skills to manage and interpret generative AI outputs, understand risks and make informed decisions, too. Keep in mind that generative AI is constantly changing, so to best protect your firm, your employees will have to receive up-to-date, regular training.
By implementing these best practices, compliance teams can harness the power of generative AI while ensuring compliance and protecting your firm’s reputation, clients and investors.
Generative AI Compliance with Confidence
The world is moving fast, and it’s clear that generative AI isn’t going anywhere. You need a compliance partner who can help you not only keep up but stay ahead.
Our consulting solutions help you not only meet the demands of the regulatory landscape, but assess, test and improve your compliance procedures, helping you comply with confidence.
As 2024 approaches and technology and the regulatory landscape continue to evolve, you cannot afford to fall behind. By choosing COMPLY, you gain a trusted and reliable partner and guide.
Need further guidance on how to integrate generative AI into your compliance program? Let’s talk!