Course outline and objectives
Artificial Intelligence ("AI"), or more specifically Machine Learning, Data Science and Neural Networks have come to the fore with the advent of open tools like Chat GPT which are often being used without proper supervision or control. These tools promise to revolutionise work, how products are created, distributed and serviced. It also promises the ability to automate routine tasks and identify patterns and anomalies in huge datasets better than humans can. This has led to a deluge of ill-informed speculation about the impact of AI.
This one-day course cuts through the noise and breaks it down into four key sections:
- An overview of what AI actually is, defining the key constituents (Machine Learning, Data Science and Neural Networks) with a high-level view of how they operate and their limitations which can be used to identify potential benefits and risks for regulated firms. We also examine how and why AI systems produce biased or discriminatory results and how this might affect Consumer Duty compliance.
- An investigation of key areas of business that could be affected and a framework that can be used for identifying risks based on the structure and limitations of AI
- Identifying how the Risk and Compliance teams can re-purpose their existing practices to provide appropriate advice and assurance to the business of the regulatory and risk impact of AI, and the new skills they might need to learn
- Finally, an exploration of the areas in which AI could help the compliance and risk teams, exploring potential subjects for discrete AI projects and how to assess their viability
By the end of the session participants will
- Understand the key constituents of AI (Machine Learning, Data Science and Neural Networks) and, at a high level, how they operate, what they are best suited for and their limitations
- Draw out the implications for key regulated processes including strategy, Product Development / Governance, distribution and post sales servicing. Also understand how AI teams work and the impact on risk and compliance oversight and advice
- Use the new understanding of how AI works to identify the areas of the business that could be most affected and how these might be risk-assessed
- Understand the extent to which existing compliance and risk tools and techniques can be re-purposed and what new skills might be necessary
- Learn and explore how AI changes concepts of "risk" of threats and the impact on operational resilience
- Understand the potential risks in the use of open-source software for AI product development
- Use the generally-accepted frameworks for assessing the viability of AI projects at your firm and determine whether management is doing the same
- Identify key risks to AI projects and how these affect compliance and risk activities
- Understand how bias and discrimination can be embedded in AI projects and how this affects the Consumer Duty
- Understand how AI might be able to support compliance and risk through discrete internal projects
Who will benefit?
This course will be of interest to Directors and Senior Management Function Holders, Compliance, Risk, Internal Audit and Senior IT staff.
Course Tutor
Gary Pitts is a consultant and trainer with 30 years of extensive expertise across the financial services sector, and his consultancy firm, Tetractys, operates in the UK and Ireland. His approach to consulting stems from the belief that without good and effective governance, meaningful compliance with regulation is impossible. Gary is a well-regarded regulatory trainer in the UK delivering courses for CTP, The Investment and Savings Alliance and for his own client base. His clients include Solvency II insurers, hedge funds, private equity managers, wholesale brokerage, consumer credit and a variety of fintech / blockchain firms.
Gary began his career with one of the original UK regulators, Lautro, then the Personal Investment Authority and has since been Head of Compliance for international hedge funds and boutique investment banks. He has been a Director of regulated firms in the UK and South Africa and has been a regulated person in the UK (CF3/10/11 and SMF 16/17) since 2001, a PCF 15 in Ireland, a director of regulated entities in South Africa and a director of Luxembourg and Cayman-domiciled hedge funds, as well as an SEC and NFA registered compliance officer.
Gary holds Masters degrees from Oxford and London Universities, a Masters of Business Administration from the Open University Business School, is a Fellow of the Institute of Leadership and Management, a Fellow of the Chartered Management Institute and an Associate of Chartered Institute of Securities and Investments. He has also completed the Said Business School's Cyber Security for Business Leaders Course, a number of AI-related courses and is training as an Expert Witness.
Course Programme
| Session |
Content |
Introduction
|
- Introduction
- Expectations
- Outcomes
|
What is "Artificial Intelligence" and the key terms?
|
- Definitions and principles of operation
- Machine Learning
- Data Science
- Neural networks
|
The benefits and limitations of artificial intelligence and how that might apply
|
- How the principles of operation described above circumscribe what AI is good at and what it is not suited to
|
Business areas affected
|
- Given what AI is good at, what business areas are most likely to benefit from AI projects?
- Given what AI is bad at, what business areas are least suited to AI projects and why? What are the pitfalls?
|
Building a risk framework
|
- Using our understanding of AI and AI projects, build an example risk framework using a case study
|
Skills required - repurposing the existing and acquiring new
|
- What personal and professional skills are required to add value / thrive alongside AI projects
- What existing compliance and risk tools and techniques do we have that we could use
- What "good" could look like
- Metrics and monitoring
|
AI, bias and ethics
|
- Based on our understanding of how AI works, how and why does bias become embedded in Systems
- Implications for Consumer Duty compliance
- Where and how can we intervene positively (e.g. PROD process, strategic review)
- How best to monitor for the risk of bias and discrimination
|
Assessing compliance and risk projects that could benefit from AI
|
- Using our understanding of how AI works, evaluate some sample compliance and risk projects to determine their viability for use as an AI project
|
Available guidance
|
- FCA guidance
- Other sources of guidance
|
SEE FULL PROGRAMME DETAILS
This course can be delivered in-house at a time and location to suit your business and tailored to suit your people and organisation. We can also create bespoke training when something very specific is needed.Please contact us to discuss your requirements in more detail and at no obligation.
