New FICO and Corinium Report Finds Financial Services Firms Lack Responsible AI Strategies Despite Surging Demand for AI Solutions
Today, global analytics software platform provider FICO released its third annual State of Responsible AI in Financial Services report, developed in collaboration with market intelligence firm Corinium. The report found that the demand for AI products and tools are on the rise with more than half of the respondents (52%) saying they are a higher priority than 12 months ago, yet the vast majority (71%) have not implemented ethical and Responsible AI in their core strategies.
Conducted by Corinium and sponsored by FICO, the report surveyed 100 C-level AI leaders in the financial services sector to examine where enterprises stand in implementing their AI strategy, approaches to AI ethics and governance, and their outlook on the future of AI initiatives.
“Even though we have seen a growth in demand for AI-driven financial products and offerings, many financial services firms have yet to develop and hold themselves accountable to Responsible AI standards,” said Scott Zoldi, Chief Analytics Officer at FICO. “Beyond fulfilling an ethical responsibility to their customers, implementing standards for Responsible AI that is explainable, auditable, and ethical helps to improve brand loyalty, reduces reputational risks, and better enables regulatory standards to be met.”
Currently, only 8% of respondents say that their AI strategies are fully mature with model development standards consistently scaled across their organizations. However, organizations are beginning to appreciate the benefits of implementing a Responsible AI strategy.
The study found that the number one benefit of Responsible AI was improving the customer experience. Delivering better experiences for customers (74%) was listed as the top benefit of Responsible AI, followed by creating new revenue opportunities (69%), and protecting brand equity/minimizing reputational risk (63%). These findings underscore that responsible use of AI protect organizations from risk and improve customer relationships, allowing financial services firm to leverage enhanced customer trust to gain market share.
“In order to succeed in AI digital transformation, it is imperative that organizations are committed to strong ethical AI practice and governance,” said Chun Schiros, SVP and Head of Enterprise Data Science Group at Regions Bank.“As we increase the use of AI applications, continuous learning and considerations of fairness and explainability are crucial to support.”
Defining Responsible AI
Corporations that undertake the process of defining Responsible AI involve leadership in aligning on a codified strategy to demonstrate how ethical AI and AI governance will be enforced in their business. However, this process remains elusive; 43% of financial services organizations report that they struggle with AI governance structures to meet regulatory requirements, and only 44% have sufficiently defined standards for Responsible AI at the board level. Just 8% of organizations describe their Responsible AI standards as mature, illustrating how this is a fluid process for many organizations.
Moreover, 57% of organizations lack agreement on how to measure AI model bias and disparate impact, and half (50%) lack an AI model development standard. The survey results show that a startling 27% of organizations indicate they haven’t started defining their Responsible AI capabilities at all.