Taking APRA’s advice
Now that the US President has decided that the AI vendors in the US are trustworthy enough to regulate themselves, this might a good opportunity to re-visit the risks and opportunities presented by AI.
We reckon there’s ample energy being devoted to the opportunity side of the equation, so today we’re focusing on the risk. In order to understand the situation, APRA conducted a targeted survey on a group of selected large banks, insurers and superannuation trustees. We can safely assume that Australian organisations generally are in a similar situation as APRA regulated entities.
Borrowing from the resulting Letter to Industry, APRA highlighted the following concerns:
Weak board oversight of AI systems
Limited accountability frameworks for AI decision-making
Inadequate monitoring of model drift and bias
Third-party and vendor opacity in AI supply chains
Poor assurance and testing practices
Operational resilience risks from AI-enabled systems
Gaps in documentation and explainability
It’s probably safe to say that these concerns are applicable to most organisations today?
We believe that leaders need to get in front of AI adoption inside their organisation, by doing the following:
Figure out who’s using it and how.
Establish a system of AI governance now.
Ensure that the use of AI is aligned with the organisation’s strategy.
Develop appropriate monitoring and supervision.
Uplift the skills of your staff, executive and Board.
Improve your operational resilience and management of Third Party risks.
Reach out if you could use some help!
https://www.apra.gov.au/news-and-publications/apra-letter-industry-artificial-intelligence-ai