US bank regulator issues first-ever AI guidance for examiners

By Pete Schroeder

WASHINGTON, Nov ‌4 (Reuters) - Big bank ​supervisors ​should monitor how lenders use artificial intelligence but should not treat it as distinct from other risks, according ‌to new regulatory guidance issued on Wednesday, as authorities globally ⁠ramp up their efforts to contain AI-driven risks.

The Office of the Comptroller of ‌the Currency, which oversees large ‌national banks, issued what it said was the first-ever guidance for how examiners should probe banks' AI usage, according to a ​copy of the document seen by Reuters.

Under the new framework, first reported by Reuters, the OCC says banks are not expected ⁠to establish separate risk parameters for AI use and examiners should not treat the technology ​as a unique risk. But examiners should consider the way a lender is using AI, as well as the ​size and complexity of the lender.

While ‌the document is not legally binding like a rule, banks typically comply closely with such guidance.

Banking regulators worldwide ⁠have been querying lenders about their AI use, worried the technology poses major cybersecurity and potentially financial stability risks. In the US, regulators have been ⁠asking banks about their use of advanced AI models, what limits banks place ​on those systems and how they monitor them, Reuters previously reported.

The OCC said its examiners should focus on the consequences of potential AI-driven mistakes at banks rather ‌than the sophistication of particular models they're using.

For example, it said a simple AI agent that is authorized ‌to initiate transactions could be considered riskier than a sophisticated model ⁠deployed for internal purposes. Higher-risk ‌uses of AI may ​require greater restrictions on autonomy or more direct human oversight, the document said.

(Reporting by Pete Schroeder; editing by ‌Michelle Price)

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