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FRM Part II · FRM Exam Part II · The Financial Stability Implications of Artificial Intelligence

A bank's treasury head says the institution is deploying artificial intelligence in several areas. According to the FSB's analysis of AI in finance, which of the following is generally described as an area where financial institutions have most commonly used AI to date?

Financial institutions have mainly used AI for customer support, fraud detection, compliance and internal efficiency. These are lower-risk supporting uses. Setting policy rates, granting central bank facilities, or removing human oversight of capital calculations are not typical current uses.

  1. AFully autonomous setting of the policy interest rate
  2. BAutomated approval of central bank liquidity facilities
  3. CReplacing all human oversight of regulatory capital calculations
  4. DCustomer support, fraud detection and internal operational efficiencyCorrect

Explanation

The FSB notes that adoption has centred on lower-risk, supporting applications such as customer service, fraud and anomaly detection, regulatory compliance and process automation. Policy rate setting and central bank facilities are public-authority functions not delegated to firms' AI. Capital calculations still need human oversight and model governance.

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