The use of artificial intelligence (AI) and machine learning (ML) in the financial sector has many benefits—from improving task automation and fraud detection to streamlining services and delivering personalized recommendations. But adopting AI/ML solutions can pose privacy, security, reputational, and operational risks for financial institutions.
Financial institutions also use different approaches and definitions for managing AI/ML requirements. This makes it challenging for Canadian fintech vendors to adopt a consistent approach in their product development and service offerings. It also makes it hard for them to compete. To address these issues and build trust between financial institutions and fintech vendors, SCC solicited the assistance of the Digital Governance Standards Institute (DGSI), part of the Digital Governance Council (DGC).
In January 2023, the DGC and the Canadian Regulatory Technology Association hosted workshops with a broad group of stakeholders and experts to identify key risks and establish consistent, standardized requirements for Canadian vendors to follow when offering AI/ML solutions to financial institutions. The result was the DGSI/WA: 2023 Baseline Requirements for Vendors Offering AI/ML Lifecycle Solutions to Financial Institutions.
The workshop agreement is intended to be used by third-party vendors offering AI/ML solutions to banks and other financial institutions and will help fintech vendors to increase innovation opportunities while building confidence in the Canadian marketplace. It covers critical steps such as establishing a model governance framework, managing risks upfront, and documenting data collection and processing. It establishes a consistent approach to common challenges institutions face when outsourcing AI lifecycle processes.
“We are happy to have partnered with Canadian RegTech Association and the Standards Council of Canada on the development of a Workshop Agreement that provides baseline requirements for vendors who offer AI/ML Solutions to financial institutions.” – Darryl Kingston, Executive Director, Digital Governance Standards Institute