Aug 14, 2019
Few experts are as deeply immersed in both financial regulation
and advanced computing technologies than Gene Ludwig, the former
comptroller of the currency who founded Promontory Financial Group,
currently an IBM subsidiary that applies
its regulatory expertise to training IBM’s Watson in banking
rules. On the latest episode of the ABA Banking Journal
Podcast, Ludwig talks about the current state of artificial
intelligence in banking and the outlook for community banks and
compliance professionals. He discusses:
- The relative skills of AI versus humans, with machine learning
making AIs like Watson increasingly good at memorizing vast
quantities of data, while humans remain excellent at intuition with
small data sets.
- The continuing need for banking talent even as AI becomes
better. “No compliance officer need fear that he or she is out of
work,” Ludwig says.
- The role of AI in helping mitigate conduct
risk, which has become magnified by social media. “To solve
those problems, you need additional compliance resources, including
technology,” he explains.
- How community banks can benefit from reduced costs as
off-the-shelf AI solutions come into the market.
- The need for AI solutions to be “explainable”
to regulators and the importance of ensuring AI tools do not
amplify existing biases to create fair lending risk.