Osfi To Finalize Risk Management Guidance Covering The Use Of Ai And Machine Learning Within Models

This article discusses the upcoming release of updated guidance on “model” risk management by the Office of the Superintendent of Financial Institutions (OSFI). The new guidance, which expands on the current version, has important implications for the use of artificial intelligence (AI) and machine learning (ML) by financial institutions. The current version of Guideline E-23 outlines OSFI’s expectations for an enterprise-wide model risk management framework and applies only to deposit-taking institutions. The proposed changes to Guideline E-23 will likely require financial institutions to have a more comprehensive approach to managing model risk, particularly in regards to AI and ML models.