Exclusive-U.S. bank regulators ramp up scrutiny of AI use at financial companies

Article excerpt

U.S. bank regulators are intensifying oversight of artificial intelligence adoption at financial institutions, according to sources familiar with the matter. The scrutiny reflects growing concern that AI systems could introduce new risks to the banking system, from algorithmic bias in lending decisions to operational failures if systems malfunction. Regulators are examining how banks test, validate, and monitor their AI tools, particularly in customer-facing applications. The move comes as financial companies race to deploy AI for everything from fraud detection to investment advice, sometimes outpacing internal safeguards.