Unknown Sponsor Bank

In May 2022, the OCC articulated supervisory expectations regarding the use of artificial intelligence by banks, as reported by Mayer Brown. The guidance addressed risk management frameworks that banks should have in place when deploying AI technologies, including those used in lending decisions, fraud detection, and compliance automation. This is relevant to the BaaS industry as many sponsor banks and their fintech partners increasingly rely on AI-driven models for underwriting and customer onboarding. The OCC's expectations create a baseline for how banks must govern AI tools, whether developed internally or provided by fintech partners. Banks failing to meet these expectations could face supervisory criticism or enforcement actions.

Verified from source: On May 13, 2022, the OCC outlined supervisory expectations for how banks should manage risks associated with artificial intelligence, including machine learning, through congressional testimony by Deputy Comptroller Kevin Greenfield. The outline identified key AI risks (explainability, data management, privacy/security, third-party providers) and supervisory expectations for risk management, model risk management, and compliance programs.