In the Banking Perspectives blog series, we invite senior leaders from across Moody’s Banking to share their insights on technology at Moody’s and the wider banking industry.
In this edition, Omar Akkor, Senior Director Manager for Banking Product Strategy, considers the human and ethical considerations of GenAI and how we account for these factors in the delivery of Moody's Banking solutions.
Q: Thank you for your time, Omar. We understand that GenAI raises significant human, ethical and other risk considerations – please could you begin by describing the human considerations of GenAI?
O: As GenAI continues to advance, its capacity to automate tasks traditionally performed by humans will, without doubt, increase. Depending on the industry, roles or functions, this could lead to a range of consequences.
On one hand, GenAI will augment human capabilities, enabling us to work more efficiently and effectively. It will allow us to focus on high value activities and eliminate manual tasks. On the other hand, it might introduce the risk of job reassignment or displacement.
This is not a new phenomenon. The rise of robotics and automation in industries like manufacturing has already led to changes to the workforce. In these cases, humans have adapted by acquiring new skills and leveraging technology to enhance productivity and quality. Similarly, all sectors must now embrace GenAI by investing in training and upskilling programs to prepare employees for new roles and responsibilities. By doing so, we can harness the power of GenAI to drive innovation and remain competitive.
Q: How about the ethical implications of GenAI?
O: There are numerous ethical implications. The first that comes to mind is bias and discrimination. GenAI models can lead to unfair outcomes if they are trained on biased data. Addressing biases in AI models is essential to ensure fairness and prevent discrimination, while fostering transparency, accountability and traceability.
Privacy is also critical. Misusing AI-generated content, and over-reliance on AI could potentially affect privacy breaches. The generation of deepfake content can invade individuals' privacy and be used for the wrong purposes. Strong guardrails are required to maintain the privacy and accuracy of GenAI-generated content.
Additionally, long term environmental and social impacts of AI must be considered, with attention to the creation of fake content and intellectual property rights. Maintaining human oversight is critical to ensure responsible AI deployment.
Q: In a previous Banking Perspectives blog, we learnt about the GenAI development process at Moody’s. How does Moody’s integrate these ethical considerations into this process?
O: To ensure that our GenAI models adhere to ethical principles, we have established a robust governance framework. This framework incorporates ethical guidelines into all stages of the AI development process, from design to deployment. By focusing on fairness, accountability, and transparency, we aim to mitigate potential risks and ensure that our AI systems are used ethically.
To protect user privacy and data security, we adhere to relevant data privacy regulations and have implemented strong security measures. Our employees also play a crucial role in monitoring AI outputs and capturing user feedback to identify and address any issues early on.
Furthermore, we leverage our partners' technologies and have established a secure architecture to safeguard against malicious use of GenAI. We leverage trusted sources of information, especially our Moody’s content, to drive high quality output. Our training programs for employees raise awareness about potential risks and promote responsible AI practices.
Q: What are the challenges of GenAI governance and implementation in banks?
O: A recent customer survey we conducted highlights the slow adoption of GenAI within medium and small-sized banks. While larger institutions have the resources to invest in GenAI, i.e. talent and infrastructure, smaller banks often face significant challenges. One major concern is the regulatory environment. Banks operate under strict regulations, and the introduction of new technologies like GenAI requires careful consideration and approval.
Another key concern is data privacy and security. Banks handle vast amounts of sensitive customer data, which must be protected from unauthorized access, use, or disclosure. Ensuring that GenAI models can process this data safely and securely is a critical challenge.
Transparency and explainability is also a major concern. Many GenAI models are considered "black boxes," making it difficult to understand how they arrive at their decisions. Regulators often demand transparency and explainability, which can be challenging to achieve with complex AI models.
Finally, introducing new technologies can be disruptive and may face resistance from employees who are comfortable with existing processes. Overcoming this resistance requires careful change management and communication to ensure a smooth transition.
Q: How does Moody’s help banks navigate these challenges, and support the smooth implementation of GenAI initiatives for clients?
O: Moody's has developed a comprehensive infrastructure and governance process to address the key concerns banks face when adopting GenAI.
“Moody's has developed a comprehensive infrastructure and governance process to address the key concerns banks face when adopting GenAI.”
Our customers are our partners. We prioritize our partners and stay informed about the latest regulations impacting the banking industry. We provide guidance and support to banks in navigating regulatory compliance.
Data security is a top priority. We have implemented robust security controls to protect sensitive customer data and prevent unauthorized access. By combining our reliable data and analytics, we offer comprehensive risk assessments that support decision-making and reduce the risk of hallucinations. All supporting information used by our GenAI models is referenced and accessible to users, allowing for review and adjustments to the generated output.
We have a proven track record of success. Several banks have successfully implemented our AI applications and realized significant benefits and value. We're excited to continue collaborating with industry practitioners on this transformative journey.
Find out more about how we’re unlocking the next generation of technology and putting it to work for you here.
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