AI Framework for State Banks and Financial Institutions

The Conference of State Bank Supervisors (CSBS) has released a new supervisory framework to evaluate the use and risks of artificial intelligence in state-chartered banks and licensed nonbank financial institutions.

The Conference of State Bank Supervisors (CSBS) publicly released a new artificial intelligence supervisory resource for state banks and nonbank financial institutions on September 16. This framework provides regulated entities with the examiners' general approach, potential questions they may ask, and information they may request regarding artificial intelligence-based products, services, and tools.

CSBS President and CEO Brandon Milhorn stated that the framework is a principled approach aimed at enabling financial institutions to explore and implement artificial intelligence with added assurance. Rather than imposing a uniform standard, the framework is designed to be scalable according to the size, complexity, risk profile, and level of artificial intelligence usage of the institutions.