Chief Compliance Officers in finance and insurance are in a Generative AI bind:
Gen AI is the new big thing. There’s a prevailing view that if you’re not using it, you’re behind the curve.
The promises of Gen AI adoption include unprecedented efficiency and personalization.
But at this moment, there are three inescapable truths about Gen AI:
- You can’t explain it;
- You can’t debias it;
- You can’t ensure its outputs are consistent.
So how can you ever trust it to make a high-stakes decision about a customer?
The answer (right now, at least) is: You can’t.
Don’t get me wrong, there are plenty of good applications for Gen AI in banking and insurance. But they’re not yet in areas:
- Where you need to know what the machine is doing; or
- Where there’s a high risk of making a mistake that results in customer harm.
So financial services and insurance firms are safe using Gen AI for staff training, as a code-writing co-pilot, and/or for generating personalized marketing content.
But for tasks like underwriting, pricing, line assignment, and collections decisions…well, right now the tech is just too risky.
That’s the bind Chief Compliance Officers face: How to embrace innovation while safeguarding against unexplainable, biased, and inconsistent decisions.
Put another way: Ride the AI wave, but don’t let it wipe you out!
