Byline Bancorp discusses AI adoption opportunities and risks from third-party models, bias, and evolving regulations.
“The financial services industry is experiencing and will continue to experience rapid technological change due to the emergence of AI, including generative AI and agentic AI. The effective use of AI enables financial institutions to better serve their customers and reduce expenses. Our success and competitiveness may depend in part on our ability to adopt such technology and deliver our products and services in a manner consistent with evolving customer preferences and industry standards. At the same time, the use of AI presents unique risks. AI models, which are primarily developed and managed by third parties, introduce risks related to model development, implementation and training. AI may also produce incorrect outputs or biased results, disclose personal or confidential information, or otherwise cause issues for us or our customers. In addition, the legal and regulatory landscape for AI is uncertain and continuously evolving, which may increase our compliance costs and risk of non-compliance. Failure to adopt AI tools that match our customer expectations and needs or failure to properly manage risks associated with AI could have a material adverse effect on our business, financial condition or results of operation.”