FCA warns on third-party risk management for AI projects

UK regulator keeping close eye on use of cloud and vendor partnerships to develop new models

FCA building in Stratford
Photo: FCA

Financial institutions’ adoption of artificial intelligence is creating a new source of third-party risk that firms must build into their broader governance framework, a senior UK regulator has warned.

“Most AI deployments are run on the cloud, and they are powered by large data,” said Jessica Rusu, chief data, information and intelligence officer at the Financial Conduct Authority (FCA). “These interdependencies create digital infrastructures and critical third-party stability risks that we have

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