AI in financial services: an update from the Bank of England

The Bank of England (BoE) has recently published some useful insights into its strategy for the deployment of AI. This transparency is intended to provide BoE staff and the public with a clear understanding of how AI is being utilised by the BoE in line with its statutory objectives of monetary and financial stability. It is also potentially informative for the wider financial services community as it continues its AI journey without any AI-specific rules or guidance in place.

Key elements of the BoE's AI strategy

There are four essential pillars to the BoE's AI strategy, which focuses on productivity, experimentation, and the responsible use of AI. These pillars are:

• Putting into place an AI framework that includes:
  • workforce understanding, so that everyone knows what is expected of them in their role;
  • strong governance;
  • robust skills in AI; and
  • collaborative partnerships;
• Ensuring that all BoE staff have access to high-quality and fit-for-purpose AI products and services;
• Driving growth, innovation and change; and
• Improving productivity by reducing routine and repetitive tasks, and by unlocking the value of human involvement.

More to do in order to progress the BoE's AI journey

It is clear from reading the BoE's strategy that although it has been using, researching and experimenting with advanced technology including AI for many years, it still has more to achieve. In particular, the BoE notes that while it can already see benefits, there is the need, and room, for continued work, including in relation to:

• creating an implementation plan for its strategy;
• promoting a culture where everyone understands how to use AI tools effectively and responsibly;
• prioritising high-business-value use cases and initiatives;
• creating a portfolio of work underway and a central repository of projects;
• enabling everyone across the business, regardless of their role, to be involved in the AI strategy and empowering everyone to have the opportunity to use AI to excel in their role;
• implementing regular review of the strategy to ensure currency and fitness-for-purpose;
• continuing to experiment with, pilot and trial AI tools;
• developing an AI skills curriculum and fostering upskilling, learning and training suitable for a range of different roles;
• continuing to attract the best talent;
• collaborating, and sharing experience and best practice;
• defining a way to identify the benefits from the investment made in AI;
• keeping pace with trends, technological advances, changing risks and macro-economic issues; and
• potentially creating an AI Centre of Excellence. 

Key takeaways for other financial services entities

If you are presently somewhere along your AI journey and are feeling in need of some guidance about how best to go about things, then taking inspiration from the BoE's approach would likely be no bad route to take. Central to the BoE's approach is its TRUSTED framework:

• Targeted: AI with clear business purpose tied to a mission and generating benefits that can be described;
• Reliable: AI grounded in high-quality data and high performance standards;
• Understood: AI that is understood;
• Secure: AI with solutions to protect data, systems and users from risks;
• Tested: AI that has been tested in relevant scenarios, including in stressed conditions;
• Ethical: AI that adheres to fundamental ethical principles including those of fairness, inclusivity, transparency and accountability; and
• Durable: AI that is future-proof.

Some practical tips and thoughts based on the BoE's strategy:

• Hold close to you the core values of safety and ethics;
• Promote a culture of safe and responsible use of AI;
• Adapt your governance framework, policies and guidance to AI;
• Establish robust and consistent data governance and management;
• Experiment, test and validate your AI;
• Train and upskill the entire workforce and bring in specialist expertise where needed;
• Foster collaboration with peers and learning from others; and
• Keep up with change, trends and development in this rapidly evolving space.

You can read more updates like this one by subscribing to our monthly financial services regulation update by clicking here, clicking here for our AI blog, and here for our AI newsletter. 

If you would like to discuss how current or future regulations impact what you do with AI, please contact me, Tom Whittaker, or Martin Cook. You can meet our financial services experts here and our technology experts here.

We have created this standalone strategy so our staff and the public have a clear understanding of what the future of AI will look like at the Bank, and how this aligns with the Bank’s overall objective to promote the good of the people of the United Kingdom by maintaining monetary and financial stability.

https://www.bankofengland.co.uk/about/governance-and-funding/staff-codes-and-policies/the-banks-ai-strategy