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4 principles of Responsible AI in financial services

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In our digitally connected world, artificial intelligence (AI) is a priority for many industries. Adding intelligent security, analytics and more to your business can be a major differentiator. Financial institutions in particular are poised to benefit from the opportunities afforded by AI—however, it’s essential that the industry uses AI in a responsible manner. To learn about our approach to building trusted and respected AI, read our e-book, Microsoft’s perspective on Responsible AI in Financial Services.

Modern financial institutions are confronting three major forces of change: technology advancement, rising customer expectations, and regulatory scrutiny. Customers today expect personalized digital experiences, including in their financial services. To deliver this, companies must understand and adopt the transformational technologies shaping today and our future, including AI. With the capacity to ingest and analyze vast quantities of data, AI can transform key business functions and enable the in-depth understanding of financial services customers necessary to deliver personalized services. Organizations that fail to integrate AI into their strategy will struggle to compete in the coming decade.

However, with all this data and interconnectivity comes increased scrutiny—especially when mistakes are made. Governments and individuals across the world are exploring the vast power of AI and its potentially disruptive impact. Privacy fears and concerns over workforce displacement are understandable, but there is also the possibility of biases in decision-making and a lack of control over the automated systems that AI enables. These concerns are valid, but with the right planning, oversight, and governance through a Responsible AI framework, financial institutions can reap the rewards of AI while avoiding pitfalls.

How can you facilitate Responsible AI?

At its core, Responsible AI is about centering people in AI frameworks, and upholding the principles that Microsoft stands for: secure, compliant, and trustworthy for both businesses and individuals. Institutions that fail to consider the full implications of unlocking intelligence-empowered financial services with AI are certain to meet with consumer backlash, loss of efficiency with responses to regulatory changes, and a myriad of other issues. Your customers need to trust you and that your intelligent tools are private and secure.

To incorporate Responsible AI into your digital transformation, your organization should consider the following principles in every step of your process:

  • Design: All intelligent solutions must have privacy and security built into their design. This means that privacy, transparency, and security should be a top priority with new product features. AI systems should also include the ability to explain the rationale for decision-making to increase trust.
  • Governance: The governance framework for AI systems needs to be built out of organizational core values and prioritize ethical considerations and regulations.
  • Monitoring: Human supervision of AI needs to occur on an ongoing basis, including auditing of algorithm’s accountability, bias, and cybersecurity. This is essential, so teams can properly govern AI and adjust the systems to address bias. This is one of the key reasons that Microsoft is building our AI platforms in an open-source manner to enable outside verification and use. Microsoft is building tools such as Fairlearn to help you enforce Responsible AI principles through technology. Fairlearn helps you identify and remediate biases in data, so you can build AI solutions that drive fairness and inclusivity.
  • Training: For many employees, AI is a new and sometimes daunting concept. It’s important that employees understand how AI systems operate and that the connection is two-ways: employees should have a voice in the creation of intelligent systems and how AI might improve their day-to-day. Employees will also need to be trained to properly take advantage of the insights AI analysis can offer. If you’re interested in learning more, Microsoft provides free training to help employees reschool through the AI School.

Transform your organization

Digital transformation and AI are rapidly changing the way financial services institutions conduct business. To learn more about technology innovations in financial services and how to apply them to your organization, read our e-books, Empowering Intelligent Financial Services and Microsoft’s perspective on Responsible AI in Financial Services. To access additional resources and learn how banks are transforming digitally using technologies from Microsoft and our solutions from our partners, visit our banking, capital markets, and insurance pages.