Regulators Propose Audit-Ready Controls to Govern AI
Regulators Propose Audit-Ready Controls to Govern AI
Publish Date: 2026-04-06 09:29:00
Source Domain: www.pymnts.com
Banks and payments companies have spent the past few years embedding artificial intelligence into their core operations. They’ve been running fraud detection, credit underwriting, customer service and anti-money laundering programs through systems that in many cases were built faster than the governance structures around them. Regulators are now catching up, and what they are asking for goes well beyond a policy statement.
The U.S. Treasury Department earlier this year published two resources, Artificial Intelligence Lexicon and the Financial Services AI Risk Management Framework (FS AI RMF), that give financial institutions a concrete structure for documenting how their AI systems are governed.
FS AI RMF was developed through a public-private body that included more than 100 financial institutions and government agencies, translating high-level AI principles into something examiners can actually test against.
The framework includes 230 control objectives organized across four functions: govern, map, measure and manage. According to law firm Lowenstein Sandler, in financial services this directly affects underwriting, fraud detection, anti-money laundering monitoring and personalization systems, and regulators will not ask whether a policy exists but will ask for logs and dashboarding.
A bank running an AI-powered loan approval system, for example, would use the framework to document who owns that model, what bias testing has been performed, how performance is tracked over time and what escalation path exists when the system produces an unexpected output.
As covered by ZwillGen, while the resources do not create new legal obligations, for companies using AI in regulated financial services they are likely to become an important reference in examinations, internal audit expectations, third-party oversight and contract negotiations, even where no regulator expressly incorporates them.
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For payments companies and FinTechs that…
