Commercial lenders shouldering heavier AI burden than central banks: ICBC president

As artificial intelligence transforms the financial sector, commercial banks are grappling with a more challenging transition than central banks, according to the president of the world's largest lender by assets, Industrial and Commercial Bank of China (ICBC). Liu Jun noted that while central bankers focus on oversight and policy, commercial lenders assume direct financial and legal responsibility when implementing AI at scale.

"If [ICBC] deploys AI tools... and all the benefits contribute to the IT balance sheet and income statements, it means I take the responsibility of the AI deployment," Liu stated during a panel discussion at the Shanghai Bund Summit on Monday. "If something bad happens, I'm going to have to pay the victim and give the final answer to the market."

Commercial banks, which serve the public and industry daily, are only now entering the digital transformation phase, facing a steep learning curve. Liu highlighted four main mismatches between AI and traditional banking: disclosure, data storage, sovereignty, and credibility. One significant challenge lies in assigning liability when different entities handle distinct parts of an opaque AI system.

Despite deploying hundreds of AI models with increased autonomy in data-heavy tasks, ICBC has retained human teams in client-facing positions. To manage operational risks, ICBC introduced a framework called the "proof of benefit," which ties accountability to those who reap financial returns and make independent decisions within the system.

Arthur Yuen Kwok-hang, deputy chief executive of the Hong Kong Monetary Authority, echoed Liu's concerns about accountability as banks integrate agentic AI – systems capable of planning and executing multi-step tasks. These institutions often divide an application among six to eight agents, but if each agent and the human supervisor bear responsibility for only a portion of the task, "nobody is responsible for the whole thing."

Hong Kong's de facto central bank unveiled an updated AI governance framework last week, focusing on accountability, resilience, and trust. The HKMA plans to publish a discussion paper on supervising AI systems, exploring accountability tied to intent, a registry of material AI agents, and intervention methods. Yuen emphasized the government's aim to create a safe environment where financial institutions can "fail fast" for innovation.