Key Takeaways
Given FINRA’s expansive guidance on GenAI and increasing scrutiny of agentic AI, firms may consider adopting the following GenAI governance and oversight measures:
- Strengthen Testing and Monitoring. Firms may want to revisit their GenAI testing and monitoring programs in response to FINRA’s expanded expectations. This process may include undertaking structured pre-deployment testing tailored to evaluate reliability, accuracy, and other performance characteristics, as well as establishing ongoing monitoring of prompts, outputs, and model behavior to confirm that GenAI tools continue to operate as intended.
- Maintain Accurate and Balanced AI-Related Disclosures. As firms expand their use of GenAI and agentic AI, they may want to build additional processes to ensure that descriptions of these tools in customer communications and marketing materials remain accurate, comprehensive, and not overstated. As we have discussed here, the SEC and DOJ have brought AI washing charges against financial services firms for misstatements and omissions in connection with AI use, so building safeguards to test and ensure the accuracy of statements about AI’s capabilities and benefits can help reduce this enforcement risk….
