When colleagues asked me to lead an AI training a few years ago, I wasn’t an expert. What became clear quickly was that AI would reshape financial services faster than expected. Today, every bank — no matter the size — needs to think seriously about AI strategy and policy.
Why It Matters
- The rapid evolution of AI is unlike anything we’ve seen. What was experimental a year ago is now in the hands of your employees and customers.
- Its use is revolutionary and already embedded in banking operations.
- AI is here to stay. Federal agencies and Congress are focused on consumer risk and financial system stability, issuing new guidance almost monthly.
How It Started
The term AI dates to a 1950s academic conference, describing the goal of replicating human thought through machines. Recent advances are visible in search engines like Google, which now provide AI-generated summaries. Initially unreliable, accuracy has improved exponentially.
Think of AI’s trajectory like the automobile’s. Early cars were costly, slow, dangerous and required mechanical skill. Over time, they became safer, faster and ubiquitous. Similarly, AI will grow more reliable as quantum computing accelerates processing, proprietary tools expand use cases and viral adoption improves data inputs — reducing errors and enhancing trust. Standards for safe use will follow, just as auto safety regulations did.
Bank Use Cases and Risk Management
AI impacts banking far beyond search engines. Key applications include:
- Fraud and AML monitoring
- Credit underwriting and risk models
- Account opening and identity verification
AI is now a national priority, likened to the moon race. Recent milestones:
- Dec. 2024: House AI Task Force report
- May 2025: GAO report on AI in financial services
- July 2025: White House “Winning the Race: America’s AI Action Plan”
- Sept. 2025: NIST AI Standards pilot feedback deadline
Add state legislation to the mix, and the focus is undeniable.
Regulators are following suit:
- OCC: Requested AI feedback (Oct. 2024)
- Fed: Launched AI Program (Dec. 2024)
- FDIC: AI compliance plan (Dec. 2024)
- NCUA: AI in Government Act compliance plan (July 2025)
This attention signals the need for documented AI policies, procedures and oversight now.
Building Your Bank’s AI Policy
Banks must act. Start with strong due diligence, trusted vendor partnerships and legal guidance. Robust policies will help your bank leverage AI’s benefits, manage risks and stay ahead of evolving standards.
