Tag: OSFI

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The root cause of the OpenAI and hugging face exploit and resilience for OSFI mandate

Colin Henderson

The code was acting with non malicious intent. However it was asked to perform its tasks inside a walled off sandbox with no internet access. Note OSFI all compliance regulators are not innocent. Their mandate is tied to B13 and E23. They must consider treatment of agentic-model containment as a security-and-resilience matter and sort out the existing inadequate definition of B21 and E23 in this regard. The models were supposed to run inside an isolated sandbox with no internet access, wired only to an internal package-registry proxy. They did not stay there. Fixated on obtaining the benchmark solution and spending … Continue reading The root cause of the OpenAI and hugging face exploit and resilience for OSFI mandate

AI, Risk

AI in financial services: regulators 2 years behind banks

Colin Henderson

This post is targeted at both banks and regulators (OSFI in Canada ). More specifically Agentic AI is the risk frame here. Agentic AI is defined here in banking context, goes exponentially beyond automation. Take mortgage sourcing. Banks have multiple and defined process for mortgages that sources, adjudicates, processes and funds. Each step is calibrated and defined and understood by regulators and those mortgages go on to be bundled and sold as tranches with known, defined risks. Where Agentic AI takes over the agent determines the best and most effective process to follow and will establish improvements which could bundle … Continue reading AI in financial services: regulators 2 years behind banks

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TD Bank created an environment that allowed financial crime to flourish

Colin Henderson

Senator Colin Deacon summarised the impact of the fine TD Bank was hit with after the US Innvestigation assessed they knowingly worked to avoid AML rules and thuse became criminals themselves. This United States Attorney General Merrick Garland humiliated this Canadian bank over something so fundamental. AML rules are intended to eliminate one aspect of the transfer of cash or funds from being criminal proceeds to legitimate business proceeds. Deacon is correct in thei being a humiliation for Canada, yet OSFI have been silent on this matter, something I find even worse. Here is a short piece on thereaction of … Continue reading TD Bank created an environment that allowed financial crime to flourish