Model Risk Management of Artificial Intelligence and Machine Learning Applications

Introduction

In the last several years, rapid adoption of artificial intelligence (AI) and alternative model-types across all sectors of the U.S. has resulted in continuous discussion and debate among risk managers at financial institutions. It has also drawn elevated regulatory attention. To promote responsible use of AI and alternative models, banks, business lines, and risk management at banks must develop a sound framework. They must address potential model risk including interp…