Uncovering hidden fault lines in artificial intelligence strategy: A data-driven risk framework for digital banking
Abstract
Artificial intelligence (AI) is rapidly transforming digital banking, promising efficiency, personalisation and competitive advantage. Nevertheless, most AI strategy failures in financial institutions are rooted not in algorithmic shortcomings but in weaknesses at the intersection of data governance, data quality and AI lifecycle management. This paper introduces a diagnostic framework designed for senior banking executives to uncover hidden fault lines in AI strategies by examining their underlying data practices. Drawing from regulatory guidance, industry case studies and scholarly research, the framework offers actionable methods to detect, trace and mitigate risks across the AI value chain. By placing data governance at the center of AI risk management, digital banks can ensure compliance, protect customer trust, maximise return on AI investment and safeguard operational resilience. This article is also included in The Business & Management Collection which can be accessed at https://hstalks .com/business/.
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Author's Biography
Dr Ramesh Sepehrrad is Vice President of Data Risk at Navy Federal Credit Union, where he leads strategic initiatives to safeguard information assets and ensure regulatory compliance across the organisation. With decades of experience in technology innovation, cybersecurity, data governance and risk management, Dr Sepehrrad is widely recognised as a thought leader, scholar, author and practitioner in multiple domains, including the financial services industry. Prior to joining Navy Federal, Dr Sepehrrad held senior positions at major corporations, overseeing enterprise-wide programmes across multiple sectors. Dr Sepehrrad holds a PhD in conflict analysis and resolution and has contributed extensively to research and best practices in risk mitigation and digital transformation. He is known for building robust risk frameworks and fostering a culture of security awareness, regularly speaking at industry conferences and advising organisations on emerging threats and innovative risk management solutions. Dr Sepehrrad is dedicated to mentoring future leaders and promoting diversity within the technology sector. As a distinguished author and technology executive with over 25 years of experience, he blends insights from international relations, social conflicts and technology. Dr Sepehrrad is a founding member of the Center for Security Innovation and has received multiple awards, including the Academy of Distinguished Engineers from multiple institutions.
