UK Finance Risk & Regulatory Leaders - AI Explainability Risks

𝗙𝗼𝗿 𝗺𝗲, 𝘁𝗵𝗲 𝗺𝗮𝗶𝗻 𝗿𝗶𝘀𝗸 𝘄𝗶𝘁𝗵 𝗔𝗜 𝗶𝗻 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗶𝘀 𝗻𝗼𝘁 𝘁𝗵𝗮𝘁 𝗶𝘁 𝗴𝗶𝘃𝗲𝘀 𝘁𝗵𝗲 𝘄𝗿𝗼𝗻𝗴 𝗮𝗻𝘀𝘄𝗲𝗿. The bigger issue is when it gives an answer that looks right but cannot be properly explained afterwards. That is where the governance challenge starts. Last week I shared some thoughts on where AI is actually reducing cycle time in financial services, and where it is adding friction. The question I kept coming back to was this: 𝗪𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝘀 𝘄𝗵𝗲𝗻 𝗔𝗜 𝗽𝗿𝗼𝗱𝘂𝗰𝗲𝘀 𝗼𝘂𝘁𝗽𝘂𝘁 𝘁𝗵𝗮𝘁 𝗮𝗻 𝗮𝘂𝗱𝗶𝘁𝗼𝗿, 𝗿𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿 𝗼𝗿 𝘀𝗲𝗻𝗶𝗼𝗿 𝗿𝗶𝘀𝗸 𝗼𝘄𝗻𝗲𝗿 𝗰𝗮𝗻𝗻𝗼𝘁 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲 𝗼𝗿 𝗱𝗲𝗳𝗲𝗻𝗱 𝘄𝗶𝘁𝗵 𝗰𝗼𝗻𝗳𝗶𝗱𝗲𝗻𝗰𝗲? I have spent the last few weeks working on this article, focusing on four areas: ❓ 𝗧𝗵𝗿𝗲𝗲 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀 𝗲𝘃𝗲𝗿𝘆 𝗖𝗙𝗢 𝘀𝗵𝗼𝘂𝗹𝗱 𝗮𝘀𝗸 𝗯𝗲𝗳𝗼𝗿𝗲 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝗔𝗜 𝗯𝘂𝗱𝗴𝗲𝘁 𝗶𝘀 𝗰𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗱 🏛️ 𝗧𝗵𝗲 𝗙𝗖𝗔 𝗮𝗻𝗱 𝗣𝗥𝗔 𝗽𝗼𝘀𝗶𝘁𝗶𝗼𝗻 𝗼𝗻 𝗺𝗼𝗱𝗲𝗹 𝗿𝗶𝘀𝗸 🇪🇺 𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝗘𝗨 𝗔𝗜 𝗔𝗰𝘁 𝗿𝗲𝗾𝘂𝗶𝗿𝗲𝘀 𝗳𝗿𝗼𝗺 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗶𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝘀 𝗳𝗿𝗼𝗺 𝗔𝘂𝗴𝘂𝘀𝘁 𝟮𝟬𝟮𝟲 📊 𝗪𝗵𝘆 𝟳𝟱% 𝗼𝗳 𝗨𝗞 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝘀𝗲𝗿𝘃𝗶𝗰𝗲𝘀 𝗳𝗶𝗿𝗺𝘀 𝗮𝗿𝗲 𝘂𝘀𝗶𝗻𝗴 𝗔𝗜, 𝗯𝘂𝘁 𝗼𝗻𝗹𝘆 𝟮% 𝗿𝘂𝗻 𝗔𝗜 𝘂𝘀𝗲 𝗰𝗮𝘀𝗲𝘀 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗵𝘂𝗺𝗮𝗻 𝘀𝗶𝗴𝗻-𝗼𝗳𝗳 𝗼𝗻 𝗶𝗻𝗱𝗶𝘃𝗶𝗱𝘂𝗮𝗹 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀 For me, the real question is not whether AI can produce an answer faster. It is whether that answer can be 𝘁𝗿𝘂𝘀𝘁𝗲𝗱, 𝗰𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝗱, 𝗲𝘅𝗽𝗹𝗮𝗶𝗻𝗲𝗱 𝗮𝗻𝗱 𝗱𝗲𝗳𝗲𝗻𝗱𝗲𝗱. If you work across finance transformation, risk, or regulatory leadership in the UK or Europe, I would be interested to hear what you are seeing in practice. #FinanceTransformation #ArtificialIntelligence #FinancialServices #CFO #GenAI