Treasury Report Identifies AI Fraud Prevention Disparities Among Banks

Smaller financial institutions face challenges in developing anti-fraud AI models due to a lack of data and expertise, according to the U.S. Treasury.

• The U.S. Treasury Department highlights a significant data gap in AI fraud prevention between large and small financial institutions, disadvantaging smaller banks.
• Smaller banks lack the internal data and expertise needed to develop their own anti-fraud AI models, leading to a need for better data sharing among financial institutions.
• The Treasury's report follows President Joe Biden's executive order on regulating AI, aiming to set new safety standards and identify risks in AI systems.
• Financial institutions are encouraged to adopt more consistent definitions of AI and share safety test results and other critical information with the U.S. government.
• The report suggests the need for standardized strategies for managing AI-related risks and emphasizes the importance of adequate staffing and training.

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American Banker PYMNTS NDTV