Moduleq Blog AI Governance: The Challenge of Language Models

In our work with Global Systemically Important Banks (G-SIBs) and other financial institutions, we find most are struggling to implement AI governance mechanisms that reduce AI risks to acceptable levels while accommodating innovation. Risk management and innovation tend to work against each other, and the rise of Generative AI and Large Language Models has made this tension particularly acute. The behaviors of these new AI technologies are not well understood even by their creators, and the risks are clearly serious. To give just a few examples: