AI model risk management
AI model risk management in financial and capital markets is no longer a forward-looking compliance question. The U.S. Office of the Comptroller of the Currency and the Federal Reserve Board have both extended their SR 11-7 model risk management guidance to cover machine learning and generative AI systems, while the U.S. Securities and Exchange Commission has signaled scrutiny of algorithmic trading and robo-advisory models under existing examination priorities. Compliance teams at broker-dealers, asset managers, and bank holding companies are currently mapping their AI model inventories against validation and governance requirements before their next supervisory cycle.
Watch
- SR 11-7 applicability to generative AI: where regulators are drawing the line
- SEC exam staff flagging AI-driven suitability determinations in broker-dealer reviews
- EU Artificial Intelligence Act high-risk classification for credit scoring models, effective 2026
- Third-party AI vendor contracts: OCC expectations on model ownership and validation accountability
- Hong Kong Monetary Authority's model risk circular and its reach for APAC-licensed entities
Recent material activity in Financial & Capital Markets
Active monitoring in place across Financial & Capital Markets. Material developments related to ai model risk management will appear here as they are published.