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Use and Risk Management of Generative AI by Japanese Financial Institutions -Based on the results of questionnaire survey-

October 29, 2024
Financial System and Bank Examination Department, Bank of Japan

Abstract

According to the results of this survey, the use of generative AI (GenAI) is spreading rapidly, with about 30% of the financial institutions already using GenAI, about 60% including those currently on trialing, and about 80% including those considering trial or use.

Regarding the purpose of introducing GenAI, almost all the financial institutions using or trialing it answered that it was "improving operational efficiency/reducing costs." The main areas of use include assisting document preparations such as "summarizing documents", "proofreading, editing, and evaluation of documents", and "translation", as well as engaging in "system development and operation management". GenAI is generally regarded to have strengths in fields such as document creation and system development, and since it is considered to have a high affinity with the operations of financial institutions, it is presumed that they expect to improve labor productivity by introducing GenAI. Regarding the evaluation after adopting GenAI, the respondents gave reasonably positive feedback, such as "exceeded expectations" or "mostly met expectations".

GenAI has its own unique risks, such as unintentional information leakage and "hallucination" (in which GenAI plausibly responds with something non-factual). When financial institutions try to promote GenAI in their business, they need to recognize these risks and build up appropriate governance structures. About 70% of the financial institutions responded to questions on the status of their management of GenAI by saying that they use their own virtually isolated areas in cloud services, introduce mechanisms to prevent both the reuse of input content by GenAI and the leakage of products to the Internet, and set restrictions on what kind of data is input. On the other hand, on topics such as the clarification of the policy for the use of GenAI, the development of practical rules, and the verification and evaluation of output data, about 50% of the financial institutions answered that they found room for improvement or that they were considering appropriate measures. As technological innovation in GenAI progresses rapidly, financial institutions are required to continuously review their operating rules in accordance with changes in risk.

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Inquiries

Examination Planning Division, Financial System and Bank Examination Department

E-mail : csrbcm@boj.or.jp