Title: “AI in Financial Services and Insurance: A Prudent Approach to Accountability Under Senior Manager Oversight”
The UK’s Senior Managers and Certification Regime (SMCR) has introduced a new layer of accountability for AI-powered systems under senior manager oversight. In financial services and insurance, organisations now need assurance that named individuals are accountable for the harm caused by their AI decisions.
Senior managers in these sectors face a triple risk: capability risk, governance risk, and liability risk. Capability risk arises when AI does not do what was promised, leading to inadequate or incorrect decision-making. Governance risk occurs when senior managers cannot defend their decisions against boards, regulators, or courts. Liability risk falls on the organisation for what its AI says and does.
To mitigate these risks, organisations must now demonstrate that they can effectively manage AI’s capabilities and ensure accountability under SMCR oversight. This requires independent validation of AI claims before deployment, ensuring that technology performs as promised and aligns with organisational governance obligations.
Straven & Co offers this assurance through its unique approach to validating AI systems for financial services and insurance clients. By examining the proposed solution against the client’s real operations, people, governance obligations, and legal exposure, Straven delivers a plain verdict: proceed, proceed with conditions, or do not. This trusted assessment is only possible because Straven & Co is independent and has no product to sell or gain from recommending more AI systems.