Artificial Intelligence: Use and Oversight in Financial Services

On May 19, 2025, the U.S. General Accountability Office ("GAO") published and publicly released GAO-25-107197 regarding artificial intelligence ("AI") in financial institutions.

GAO, often called the "congressional watchdog," is an independent, non-partisan agency that works for Congress. GAO examines how taxpayer dollars are spent and provides Congress and federal agencies with objective, non-partisan, fact-based information to help the government save money and work more efficiently.

The GAO found that the use of AI in financial institutions presents both benefits and risks. AI is being applied in areas such as automated trading, credit decisions, and customer service. Benefits can include improved efficiency, reduced costs, and enhanced customer experience, such as more affordable personalized investment advice. However, AI also poses risks, including potentially biased lending decisions, data quality issues, privacy concerns, and new cybersecurity threats.

The GAO found that the use of AI in financial institutions presents both benefits and risks.

The GAO conducted this study because the Dodd-Frank Wall Street Reform and Consumer Protection Act includes a provision for GAO to annually report on financial services regulations. In preparing this report GAO reviewed studies by federal agencies, academics, industry, and other groups; examined documentation and guidance from federal financial regulators; and interviewed regulators, consumer and industry groups, researchers, financial institutions, and technology providers. The report can be seen HERE