Before deploying any AI tool in compliance or risk functions, your organization must be able to answer a few critical questions: • Can the system identify the specific regulatory sources it drew upon? • Are its responses verifiable against those sources? • Can you log and retain inputs and outputs in a retrievable format? • Is it calibrated to your regulatory environment, or generating generic answers from undifferentiated public data? If any of those can’t be answered, you have risk exposure. The Documentation Standard Documentation in an AI-assisted compliance environment goes beyond saving a copy of the output. The standard should capture what was asked, what documents were submitted, the complete response, the specific regulatory texts cited and who reviewed it, including what they evaluated it against and whether it was modified before use. For regulatory research, retain the original query, the full response, the sources cited, the reviewer’s name and any changes made before the output was relied on. Store it somewhere retrievable for an exam, not buried in a chat thread or a personal folder. When AI plays a role in exam preparation or a control assessment, document the scope of the review, where AI output was incorporated and how it was validated before use. When an examiner starts asking questions, documentation is what separates a program that holds up from one that doesn’t. When the Examiner Asks, You Need an Answer The organizations best positioned for AI-related exam scrutiny won’t necessarily be the ones that moved slowest. They’ll be the ones that were deliberate about which AI they deployed, how they used it and what controls surrounded it. When an examiner asks how your organization reached a specific conclusion, the question isn’t whether you used AI to get there. It’s whether you can open the box and show them exactly what happened. Ncontracts provides integrated risk management, compliance and third-party risk management solutions to over 5,500 organizations worldwide, including 4,500 U.S. financial institutions, mortgage companies and fintechs. The flagship Ncontracts IRM suite combines AI-powered software with expert services, helping financial institutions streamline risk, compliance and vendor management through an intuitive, cloud-based platform. Ncontracts’ Venminder solution is trusted by enterprise financial companies and other large organizations to strategically manage third-party risk across the entire vendor lifecycle. Visit ncontracts.com or follow the company on LinkedIn and X for more information. YOUR DEBT PORTFOLIO MAY NOT BE KEPT IN HERE, BUT IT’S STILL AN ASSET They may not be currency, but debt portfolios which include credit card, auto deficiency, overdraft, judgements or commercial and consumer loans definitely have value. We’ll buy your debt portfolio from the last four years, with minimum sizes of $100k on at least ten accounts and no maximums. We’ll even walk you through the sales process to help with compliance and data integrity. To offload your debt portfolio, contact Craig Geisler at cgeisler@cherrywoodenterprises.com or (321) 247-5066. 23 Colorado Banker
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