The Office of the Comptroller of the Currency’s guidance to its regulated banks fails to address technologies that rely on artificial intelligence and machine learning, despite their rapid industry adoption.

The OCC regulates nearly 1,200 national banks and federal savings associations with combined assets of more than $14.1 trillion, including Citigroup, JP Morgan Chase & Co., and Wells Fargo & Co. The regulator’s annual budget exceeds $1 billion.

The core OCC guidance on vendor technology relationships has not been materially updated since 2013. The regulator has offered a selection of frequently asked questions, or FAQ, as a supplement to the 2013 guidance, but that FAQ — last amended in March 2020 — generally excludes guidance on the most current analytical technologies.

A spokeswoman for the OCC declined to comment or to say when the regulator would update its guidance.

The OCC referred to a joint statement by the Federal Financial Institutions Examination Council (FFIEC) on security in the cloud, dated 2018, as evidence that it is providing current technology guidance. That joint statement addressed infrastructure as a service, platform as a service, and software as a service. It also provided guidance on the use of data sets.

The banking industry’s adoption of new technologies has progressed rapidly since 2018, and certainly since 2013. The pandemic has brought an acceleration of technology adoption, particularly as it relates to automation technology, Bank Automation News data shows.

The lack of guidance could be problematic as more banks shift to cloud-supported AI and machine learning functionalities. Just last week, the Bank of New York Mellon announced a partnership with Google for Google’s cloud division to run AI on the bank’s treasury settlement data in order to forecast daily settlement failures and “improve overall market liquidity.”

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