Artificial Intelligence Use & Governance
L’OR Analytics incorporates artificial intelligence into selected analytical, narrative-generation, and quality-control functions. AI is used to assist in interpreting and communicating financial information; it does not replace the underlying regulatory data, deterministic calculations, validation processes, or the professional judgment of the financial institution.
How We Use AI
L’OR Analytics may use AI to identify trends and noteworthy financial relationships, generate explanatory narrative from structured financial information, and assist in reviewing completed reports for potential inconsistencies or anomalies.
Financial balances, ratios, peer comparisons, reporting periods, and other quantitative information are derived from identified data sources and programmatic calculations rather than relying upon an AI model to independently generate financial data.
AI-generated content is subject to automated validation and quality-control processes designed to identify potential inconsistencies between source information, calculated results, and report content.
Risk-Based Controls
L’OR Analytics maintains controls appropriate to the nature and intended use of its AI-enabled functionality. These include separation of source data and deterministic calculations from AI-generated analysis, automated validation and audit processes, exception handling, and controls intended to prevent identified material errors from proceeding through the normal report-delivery process.
L’OR Analytics is an analytical and decision-support platform. It is not designed to make lending, underwriting, deposit, pricing, adverse-action, BSA/AML, or other customer-level eligibility decisions.
Regulatory Considerations
Federal financial institution regulators recognize that artificial intelligence can provide benefits while introducing risks that should be appropriately identified, managed, and monitored.
The National Credit Union Administration (NCUA) permits credit unions to use AI and currently supervises AI use through its existing technology-neutral supervisory framework. NCUA emphasizes safety and soundness, applicable laws and regulations, internal controls, ongoing risk monitoring, and appropriate due diligence when third-party AI providers are used.
For banking organizations, federal regulators similarly apply risk-based principles to technology and third-party relationships. Current interagency guidance emphasizes that third-party risk-management practices should be appropriate to the nature, complexity, and risk of the relationship.
L’OR Financial Analytical Systems considers these principles in the design and ongoing governance of AI-enabled functionality within L’OR Analytics.
Regulatory Resources
Customers and prospective customers may review relevant regulatory guidance directly from the applicable federal agencies:
Credit Unions
- NCUA — Artificial Intelligence Resources for Credit Unions
- NCUA — Evaluating Third Party Relationships
- NCUA — Due Diligence Over Third Party Service Providers
Banks
- OCC / Federal Reserve / FDIC — Interagency Guidance on Third-Party Relationships: Risk Management
- OCC / Federal Reserve / FDIC — Revised Model Risk Management Guidance
Review L’OR Analytics — Artificial Intelligence Governance & Controls (PDF)
Important Notice
L’OR Analytics is an analytical and decision-support product and does not provide legal, regulatory, accounting, or investment advice.
References to regulatory guidance are provided for informational purposes and to describe risk-management principles considered in the design and operation of L’OR Analytics. Such references do not constitute or imply endorsement, approval, certification, or a determination of regulatory compliance by the NCUA, FFIEC, Federal Reserve, FDIC, OCC, or any other governmental or regulatory agency.
Each financial institution remains responsible for evaluating L’OR Analytics within its own risk-management, vendor-management, information-security, compliance, and governance frameworks.