Q&A on Regulating AI in Banking

By Kevin Flanagan, Director of Marketing, Micronotes

Following our recent webinar Regulating AI in Banking (watch the replay), we received some thoughtful questions from a chartered financial analyst at a major commercial and investment bank about a new AI-enabled offering from Bank of America.

Micronotes CEO Devon Kinkead answered the questions, with input from our special guest on the webinar, Mark Casady, a former member of the Financial Industry Regulatory Authority board of governors and now a general partner with Vestigo Ventures.

Here are those questions and answers, so others can benefit from the insights about this important topic.

Question 1: Bank of America has recently launched an AI-enabled service offering ["Erica"] for retail clients. Who “owns” the customer data & metadata in this case? Is the data currently (or could it become) portable with the customer if they switch banks?

Answer: Looking at the information BOA provides about Erica, the data usage policy is clear, but the question of data ownership is not: https://www.bankofamerica.com/privacy/overview.go. Practically speaking, we don’t see this data becoming portable in the near future.

Question 2: What legal or normative boundaries (if any) exist on the bank’s use of customer-harvested data through a service like this?

Answer: The boundaries appear to be same as they would be for mobile or online banking; for example, the same privacy, security, and use policies would apply for customer responses to survey questions posed online.

Question 3: Are there additional third-party developers or partners that have rights to the customer’s use & interaction with the service?

Answer: I would, again, liken these interactions to survey responses. Survey responses could be shared with third parties, based on my reading of this privacy policy: https://www.bankofamerica.com/privacy/consumer-privacy-notice.go.

Question 4:  What groups or legislative bodies are formulating regulatory or industry guidance for creating boundaries around services like this?

A: We don’t see any new regulatory agencies forming around artificial intelligence or machine learning, but we do expect to see a steady influx of AI/ML technical talent into the current regulatory bodies: The Federal Deposit Insurance Corporation, the Federal Reserve Board, and the Office of the Comptroller of the Currency.