AI Governance Framework - Financial Services Edition

Overview

Financial regulators have specific expectations for AI governance. SR 11-7 applies to AI models. Fair lending laws require non-discrimination testing. SEC expects AI disclosure and suitability. You can't implement governance without addressing these regulatory requirements—and generic frameworks don't.

This framework provides financial services-specific governance. It integrates with your existing three lines of defense, model risk management, and compliance infrastructure while adding AI-specific requirements.

What's Inside

• Why Financial Services AI Governance Is Different: Regulatory intensity, examination expectations, fiduciary duties, consumer impact, existing risk framework integration
• Regulatory Landscape: SR 11-7 model risk management, fair lending (ECOA, FCRA), SEC and FINRA requirements, consumer protection (UDAP/UDAAP), state regulations, emerging AI-specific rules
• Framework Architecture: Three lines of defense integration, board and committee structure, risk appetite alignment
• The 5 Pillars for Financial AI:
  • Strategy & Leadership with board oversight requirements
  • Risk Management aligned with enterprise risk and MRM
  • Compliance with regulatory examination readiness
  • Ethics extending fiduciary duty to AI
  • Operations with audit trail and documentation requirements
• Organizational Structure: Financial services governance roles—MRM integration, compliance coordination, business line responsibilities
• Implementation Roadmap: Phased approach accounting for regulatory timelines and examination cycles
• Financial Services Policy Templates: Ready-to-customize policies for financial institution requirements
• Model Risk Management Integration: How AI governance integrates with SR 11-7 MRM—avoiding duplicate processes while meeting both requirements
• Governance Maturity Model: Financial services-specific maturity levels aligned with regulatory expectations
• Case Studies: Financial institution governance examples and examination lessons

Who This Is For

• Chief Risk Officers responsible for AI in risk frameworks
• Chief AI Officers at financial institutions
• Model Risk Management integrating AI into MRM
• Compliance Officers ensuring regulatory compliance
• Fair Lending Officers governing AI credit decisions

Why This Resource

Financial regulators examine AI governance. This framework is designed for examination readiness—not just governance operations, but documentation, policies, and structures that satisfy regulatory expectations. MRM integration ensures you don't create duplicate processes.

Three lines of defense integration works with your existing risk infrastructure.

FAQ

Q: How does this integrate with SR 11-7 model risk management?

A: The MRM integration section shows how AI governance and MRM work together—which requirements overlap, which are AI-specific additions, and how to avoid duplicating processes while satisfying both frameworks.

Q: What about fair lending for AI credit decisions?

A: Fair lending is addressed throughout—in the ethics pillar, compliance pillar, and specifically in policy templates. The framework ensures AI credit decisions are tested for discrimination and documented for examination.

Q: How do we prepare for regulatory examinations?

A: The framework is designed for examination readiness throughout. Documentation requirements, policy structures, and governance records are all organized for examiner review.