Russian Central Bank provides financial institutions with AI-focused guidance
The Central Bank of the Russian Federation has released a new advisory code for the ethical use of artificial intelligence (AI) in financial organizations. This move is part of a broader effort by central banks globally to ensure responsible and human-centric AI adoption, with a focus on fairness, transparency, security, and risk management.
### Key Guidelines and Principles:
The Russian Central Bank’s Code of Ethics for AI applications in financial organizations underscores the importance of building trust among customers and investors by ensuring AI systems are used responsibly, transparently, and fairly. This includes preventing bias and discrimination, fostering equal treatment, and enhancing customer protection through ethical AI usage.
Financial organizations are encouraged to document AI methods and processes thoroughly to ensure clarity on how decisions are made by AI systems, enabling stakeholders to understand and trust AI operations. Transparency also involves clear communication with customers about AI use in financial services, promoting an informed and responsible environment.
Given the critical nature of financial data, the guidelines emphasize robust cybersecurity measures around AI applications to protect sensitive data and operations. Central banks highlight the need for stronger data governance frameworks to prevent data breaches or misuse.
Central banks advocate for comprehensive risk management frameworks to identify, assess, and monitor AI-related risks continuously. This includes regular audits, incident response strategies, business continuity planning, and constraints on high-risk AI use cases. Financial firms are encouraged to develop governance models, policies prohibiting certain risky AI practices, and provide training to personnel on AI risks and regulatory compliance.
The Bank for International Settlements (BIS) report on AI governance for central banks proposes structured governance frameworks combining data management, organizational policies, and risk controls to mitigate unidentified risks and ensure responsible AI integration aligned with organizational goals.
According to a thematic review of AI use in the financial sector, many organizations have adopted ethical AI standards (63%) and AI user rules (82%) to guide responsible AI usage. Larger financial entities tend to have more advanced practices, strategies, and dedicated personnel to oversee AI deployment and risk mitigation.
### Implications for the Central Bank of Russia:
The Central Bank of Russia’s AI Code of Ethics and the BIS-guided governance frameworks collectively promote a comprehensive, multi-dimensional approach to AI governance in the financial sector. The aim is to harness AI’s benefits while safeguarding customers, markets, and institutions from emerging risks associated with AI technologies.
The Central Bank uses AI for handling complaints, but it has returned to manual mode for re-grading materials following an experiment, as stated by CB Chair Elvira Nabiullina. Clients are given an opt-out option regarding AI interaction, and financial organizations are urged to inform clients about their interaction with AI.
In May, CB Chair Elvira Nabiullina stated that AI's capabilities are limited, and the head of the CB's Department of Financial Technologies, Stanislav Korop, believes soft regulation of AI technology is appropriate at this stage. The advisory code aims to increase trust between people and companies in new technology, but it was not directly related to the AI experiment mentioned.
The CB Chair, Elvira Nabiullina, believes that AI cannot replace the CB's board of directors in making key rate decisions. The advisory code recommends regular quality checks on AI to ensure its continued effectiveness and reliability.
Sources: [1] Bank for International Settlements (BIS), AI Governance for Central Banks, January 2025. [2] Central Bank of Russia, Code of Ethics for AI applications in financial organizations, 2023. [3] Thematic Review of AI Use in the Financial Sector, Central Bank of Russia, 2024. [4] Elvira Nabiullina, Speech on AI and the Financial Sector, Central Bank of Russia, May 2023.
The Russian Central Bank's Code of Ethics for AI applications in financial organizations emphasizes the integration of ethical AI usage to foster trust among customers and investors, by preventing bias and discrimination and promoting transparency and fairness in AI decision-making processes. Concurrently, technology, specifically artificial-intelligence, is recognized as an essential tool by financial business worldwide, and central banks globally advocate for its secure and responsible adoption, focusing on risk management, data security, and compliance with ethical principles.
