Banks Must Resolve Explainability and “Black Box” Risk Governance Challenges to Succeed With AI Post-Pandemic, Says Economist Intelligence Unit Report Supported by Temenos
Data bias, “black box” risk, and lack of human oversight are the main governance issues for banks using AI, according to the Economist Intelligence Unit (EIU) report “Overseeing AI: Governing artificial intelligence in banking”. The report is based on a review of global regulatory guidance on AI risks and governance in banking carried out by the EIU on behalf of Temenos (SIX: TEMN), the banking software company.
The report trends will be discussed on the webinar “Rules of the game changer – governing AI in banking” on 23 July, with CWB Financial Group, TSB Bank and Temenos.
The report highlights that AI is a top priority for technology investment for banks and reveals that 77% of banking executives believe that AI will separate winning from losing banks. AI is expected to retain its importance after the pandemic as banks look to new technologies to help them adapt to changing customer needs and compete with new market entrants. The EIU report reveals that ensuring ethical, fair and well-documented AI-based decisions will be vital for banks deploying AI technology.
The EIU report highlights key governance challenges and distils regulatory guidance for banks using AI, including:
- Ethics and fairness: banks must develop AI models that are ‘ethical by design’. AI use cases and decisions should be monitored and reviewed and data sources regularly evaluated to ensure that data remains representative.
- Explainability and traceability: steps taken to develop AI models must be documented in order to fully explain AI-based decisions to the individuals they impact.
- Data quality: bank-wide data governance standards must be established and applied to ensure data accuracy and integrity and avoid bias.
- Skills: banks must ensure the right level of AI expertise across the business in order to build and maintain AI models, as well as oversee these models.
Prema Varadhan, Chief Product Architect and Head of AI, Temenos, commented: "AI is changing the face of the banking industry. It gives banks the ability to process more data in real time, and learn from customer behaviors, helping them to bring operating costs down and hyper-personalize their services. Banks are using AI to transform their customer experiences and back-office operations so ensuring that the technology is deployed ethically is more important than ever. “White box” models, like Temenos’ Explainable AI (XAI), can explain in simple human language how decisions are made and win the trust of regulators and customers alike. As the custodians of customer data and trusted advisors, banks have a responsibility to adopt transparent, explainable AI technology – those that do stand to gain the competitive advantage in the new normal.”
The EIU review cites data bias that leads to discrimination against individuals or groups of people as among the most prominent risks for banks using AI. Commenting in the EIU review, Prag Sharma, Senior Vice President, Citi Innovation Labs, said: “Bias can creep into AI models in any industry, but banks are better positioned than most types of organizations to combat it. Maximizing algorithms’ explainability helps to reduce bias.”
Pete Swabey, Editorial Director EMEA – Thought Leadership, The Economist Intelligence Unit, said: “AI is seen as a key competitive differentiator in the sector. Our new study, drawing on the guidance given by regulators around the world, highlights the key governance challenges banks must address if they are to capitalise on the AI opportunity safely and ethically.”
About the review
The EIU conducted a structured review of 25 reports, discussion papers and articles, and summarized the main issues raised by regulators on the topic of managing AI risks in banking. These documents were published in the last three years by banking and financial sector supervisory authorities, central banks and supranational institutions, universities and consultancies.
The AI regulatory review follows a global research survey released by the EIU and Temenos, entitled “Forging new frontiers: advanced technologies will revolutionize banking,” released in June 2020.
– Ends –
Temenos AG (SIX: TEMN) is the world’s leader in banking software. Over 3,000 banks across the globe, including 41 of the top 50 banks, rely on Temenos to process both the daily transactions and client interactions of more than 500 million banking customers. Temenos offers cloud-native, cloud-agnostic and AI-driven front office, core banking, payments and fund administration software enabling banks to deliver frictionless, omnichannel customer experiences and gain operational excellence.
Temenos software is proven to enable its top-performing clients to achieve cost-income ratios of 26.8% half the industry average and returns on equity of 29%, three times the industry average. These clients also invest 51% of their IT budget on growth and innovation versus maintenance, which is double the industry average, proving the banks’ IT investment is adding tangible value to their business.
For more information, please visit www.temenos.com.
Jessica Wolfe & Grace Collins
Temenos Global Public Relations
Tel: +1 610 232 2793 & + 44 20 7423 3969
Alistair Kellie & Andrew Adie
Newgate Communications on behalf of Temenos
Tel: +44 20 7680 6550
About Business Wire
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Subscribe to releases from Business Wire
Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Business Wire
GPD Companies, Inc. to Acquire Distrupol22.1.2021 16:33:00 EET | Press release
GPD Companies, Inc., an affiliate of One Rock Capital Partners, LLC (“One Rock”), today announced that it has entered into a definitive agreement to acquire Distrupol, a subsidiary of Univar Solutions Inc. (NYSE: UNVR) and a leading European distributor of thermoplastics to the polymer processing industry. Terms of the transaction, which is expected to close in the first half of 2021, were not disclosed. Headquartered in Surrey, England, with broad geographic reach across Europe, Distrupol has provided value-added sales and application development of thermoplastic resins for over 50 years. Through its decades-long relationships with world class supply partners, the company offers a robust array of superior performance products and solutions that meet the needs of diverse end users from leading and emerging industries, such as the consumer, medical, automotive, and electrical sectors, among others. Distrupol caters to over 1,300 customers across 13 countries with a portfolio of over 4,0
Schlumberger Announces Fourth-Quarter and Full-Year 2020 Results22.1.2021 14:50:00 EET | Press release
Schlumberger Limited (NYSE: SLB) today reported results for the fourth-quarter and full-year 2020. Fourth-Quarter Results (Stated in millions, except per share amounts) Three Months Ended Change Dec. 31, 2020 Sept. 30, 2020 Dec. 31, 2019 Sequential Year-on-year Revenue $5,532 $5,258 $8,228 5% -33% Income (loss) before taxes - GAAP basis $471 $(54) $452 n/m 4% Net income (loss) - GAAP basis $374 $(82) $333 n/m 12% Diluted EPS (loss per share) - GAAP basis $0.27 $(0.06) $0.24 n/m 12% Adjusted EBITDA* $1,112 $1,018 $1,648 9% -33% Adjusted EBITDA margin* 20.1% 19.4% 20.0% 73 bps 6 bps Pretax segment operating income* $654 $575 $1,006 14% -35% Pretax segment operating margin* 11.8% 10.9% 12.2% 90 bps -40 bps Net income, excluding charges & credits* $309 $228 $545 35% -43% Diluted EPS, excluding charges & credits* $0.22 $0.16 $0.39 37% -44% Revenue by Geography International $4,343 $4,210 $5,834 3% -26% North America 1,167 1,034 2,339 13% -50% Other 22 14 55 n/m n/m $5,532 $5,258 $8,228 5% -
JEOL: Release of a New Cold Field Emission Cryo-Electron Microscope CRYO ARM™ 300 II (JEM-3300)22.1.2021 09:00:00 EET | Press release
JEOL Ltd. (TOKYO:6951) (President & COO Izumi Oi) announces the release of a new cold field emission cryo-electron microscope (cryo-EM), the CRYO ARM™ 300 II (JEM-3300), to be released in January 2021. This new cryo-EM has been developed based on the concept of "Quick and easy to operate and get high-contrast and high-resolution images". This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210121005316/en/ Cold Field Emission Cryo-Electron Microscope CRYO ARM(TM) 300 II (JEM-3300) (Photo: Business Wire) Development Background Recent dramatic improvement of resolution in single particle analysis (SPA) using cryo-EM has led to SPA as an essential method for structural analysis of proteins. To address this market, JEOL released the CRYO ARM™ 300 in 2017. Equipped with a cold field emission gun (Cold FEG) for enhanced resolution and a cryo-stage for loading multiple samples, the CRYO ARM™ 300 has continued to achieve best-in-class res
ViiV Healthcare announces FDA approval of Cabenuva (cabotegravir, rilpivirine), the first and only complete long-acting regimen for HIV treatment22.1.2021 01:12:00 EET | Press release
ViiV Healthcare, the global specialist HIV company majority owned by GlaxoSmithKline plc (“GSK”), with Pfizer Inc. and Shionogi Limited as shareholders, today announced that the US Food and Drug Administration (FDA) approved Cabenuva, the first and only complete long-acting regimen for the treatment of HIV-1 infection in adults. Cabenuva is provided as a co-pack with two injectable medicines — ViiV Healthcare’s cabotegravir and Janssen’s rilpivirine — dosed once monthly, as an option to replace the current antiretroviral (ARV) regimen in those who are virologically suppressed (HIV-1 RNA less than 50 copies per milliliter [mL]) on a stable regimen, with no history of treatment failure, and with no known or suspected resistance to either cabotegravir or rilpivirine. Prior to initiating treatment of Cabenuva, oral dosing of cabotegravir and rilpivirine should be administered for approximately one month to assess the tolerability of each therapy.1 Lynn Baxter, Head of North America, ViiV H
Incyte Announces Acceptance and Priority Review of BLA for Retifanlimab as a Potential Treatment for Patients with Squamous Cell Carcinoma of the Anal Canal (SCAC)22.1.2021 00:30:00 EET | Press release
Incyte (Nasdaq:INCY) today announced that the U.S. Food and Drug Administration (FDA) has accepted for Priority Review its Biologics License Application (BLA) for retifanlimab, an intravenous PD-1 inhibitor, as a potential treatment for adult patients with locally advanced or metastatic squamous cell carcinoma of the anal canal (SCAC) who have progressed on, or who are intolerant of, platinum-based chemotherapy. The BLA submission is based on data from the Phase 2 POD1UM-202 trial evaluating retifanlimab in previously treated patients with locally advanced or metastatic SCAC who have progressed on, or are intolerant of, standard platinum-based chemotherapy. The trial enrolled 94 patients, including several with well-controlled human immunodeficiency virus (HIV) infection. The study, which was recently presented at the European Society for Medical Oncology (ESMO) Virtual Congress 2020, resulted in an objective response rate (ORR) of 14% for retifanlimab monotherapy as determined by inde
Wistron and Kalray Announce FURIO1200™ Storage Appliance21.1.2021 19:45:00 EET | Press release
Wistron, a leader in ICT (Information and communications technology) products, and Kalray (Paris:ALKAL) (Euronext Growth Paris: ALKAL), a leading provider in new generation of processors specialized in Intelligent Data Processing from Cloud to Edge, announce the availability of FURIO1200™, a 24-Flash-Drive NVMe-oF based storage node appliance, integrating Kalray’s NVMe-oF K200™ smart storage adapter, powered by its MPPA® Coolidge™ intelligent processor, and Wistron LYMMA chassis. FURIO1200™ is a new type of hyper-fast disaggregated storage solution delivering ultra-high throughput and reliability. It is the ideal solution for Cloud Service Providers and Enterprises running applications with intensive AI and Data Analytics workloads as well as to optimize their next generation storage. Data Centers are undergoing a very important revolution due to the explosion of usages, the surge of data to be processed and the exponential growth of the number of machines to be managed to support this
NumAlim Selects Dawex and Orange Business Services for its Data and Services Exchange Platform21.1.2021 19:40:00 EET | Press release
NumAlim announced an agreement with Dawex, the leader in Data Exchange technology, and Orange Business Services, a network-native digital services company, to deploy its agri-food digital exchange platform. By relying on these two leading players, NumAlim chose secure technological solutions guaranteeing the sovereignty of French food data. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210121005722/en/ (Photo: Dawex) As early as Q1 2021, the NumAlim data and services exchange "Hub" will offer 18,000 companies in the food industry the opportunity to valorize, acquire and enrich all types of data: production, consumption, traceability, consumer opinions and research, as well as a wide range of services based on data (trend analysis, reformulation, regulatory watch…). "NumAlim is the answer to the needs for transparency, value creation and trust expressed by the food industry, consumers, and public authorities.” says Jérôme Fr
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.Visit our pressroom