The integration of artificial intelligence (AI) in financial services must be approached with caution and a strong governance framework to ensure its transformative potential is fully realized, according to Emmanuel Bonoan, Vice Chairman and COO at KPMG R.G. Manabat & Co. In his remarks at the recent Asian Banking and Finance Forum in Manila, Bonoan stressed the importance of transparency, fairness, and compliance with regulatory standards in the use of generative AI (genAI) within the sector.
As AI continues to evolve, Bonoan highlighted that financial institutions should prioritize structured governance to monitor AI deployment, ensuring its alignment with business goals and ethical standards. He emphasized that AI adoption should not be rushed but approached thoughtfully, with clear oversight and adequate preparation.
Clear Governance and Responsible AI Adoption
Bonoan advocated for a phased approach to AI implementation, advising companies to “dip their toes into the AI waters” rather than commit to widespread deployment without a clear understanding of the technology’s impact. He stressed the importance of beginning with targeted “sexy use cases” that offer clear value before scaling AI operations across an entire organization.
Moreover, Bonoan cautioned against the dangers of relying on inaccurate or unreliable data when developing AI models. “Running AI on inaccurate data can lead to serious problems, risking reputation and attracting regulatory scrutiny,” he warned. Financial institutions should invest in high-quality data and establish robust testing and validation processes to ensure AI systems are continuously monitored and improved.
Ensuring Fairness and Transparency
At the heart of Bonoan’s recommendations is the need for fairness and transparency in AI-driven decision-making. As generative AI becomes more prevalent in financial services, companies must ensure their AI systems operate transparently and in compliance with regulatory guidelines. “You need to communicate clearly that AI plays a role in your decision-making process, but the final judgment comes from a human being,” Bonoan explained, referencing the practice of adding disclaimers when AI-assisted opinions are presented.
Strategic AI Integration
Bonoan also underscored the importance of integrating AI into existing business processes rather than introducing it as a standalone tool. For organizations to gain maximum benefit, AI systems must be aligned with operational workflows and supported by teams with the necessary skills to manage and optimize the technology.
He further emphasized that AI strategies must be communicated clearly across the organization. Ensuring that all stakeholders, from senior management to frontline employees, understand both the technology’s potential and its risks is crucial for successful adoption.
AI’s Role in Risk Management and Business Innovation
In discussing AI’s impact on financial services, Bonoan pointed to risk management as one of the most promising areas for AI application. He urged organizations to focus on solving specific business problems with AI, rather than adopting the technology for its own sake. “Understand the business outcome you want to achieve, and then consider how you can use genAI to help solve these problems,” he advised.
In particular, he noted that financial services, wealth management, and banking sectors should look beyond AI hype and focus on where the technology can offer the most significant impact. Companies should prioritize large-scale, enterprise-level changes rather than isolated AI initiatives.
Generational Drive for Innovation
Bonoan also noted the growing influence of younger workers in driving AI innovation within organizations. At KPMG, where the average employee age is between 28 and 32, Bonoan observed a culture of innovation that pushes the company to seek out cutting-edge products and processes.
“The younger generation is crucial to driving innovation and ensuring that businesses remain competitive in an increasingly tech-driven landscape,” he said. He also advised financial institutions to step back from the buzz surrounding generative AI and take a more thoughtful approach, balancing the technology’s opportunities with its associated risks.
As AI continues to reshape industries worldwide, Bonoan emphasized that it is essential for financial institutions to take a principled approach to adoption. By establishing clear governance structures, promoting transparency, and ensuring the right skills and data are in place, companies can unlock AI’s transformative potential while safeguarding their reputations and regulatory compliance.
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