National Bank of Canada | Artificial intelligence framework to preserve the human aspect at National Bank of Canada

Status
Omitted
AGM date
Previous AGM date
Proposal number
9
Resolution details
Company ticker
NA:CN
Lead filer
Mouvement d'éducation et de défense des actionnaires (MÉDAC)
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Digital rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Financials
Company HQ country
Canada
Resolved clause
It is proposed that the Bank produce a report on the use of artificial intelligence to make decisions at senior levels, assess risks and underwrite credit.
Supporting statement
Artificial intelligence is rapidly transforming the financial sector, particularly in terms of risk analysis, credit automation, fraud detection and product recommendation. This transition does involve new risks, which have been clearly identified in international research and policies. The International Monetary Fund (IMF), in a report published in August 2023 (Generative AI in Financial Services: Risks and Policy Considerations),(1) warns against: “Algorithmic biases, breaches of privacy, threats to financial stability and governance risks stemming from the unregulated use of AI.” In tandem, many renowned experts, including Yoshua Bengio, Turing Award winner and a leading figure in AI research, have publicly expressed their growing concern about the lack of effective safeguards. In an interview with Les Affaires (May 2023), Bengio stated: “There is a real urgency to act. Powerful AI systems are already capable of manipulating or misleading.” These warning signals have led several countries to adopt or examine regulatory frameworks. At the federal level, Bill C-272 (2) (Digital Charter Implementation Act), which is currently before the Senate, proposes the creation of a specific legal framework for high-impact artificial intelligence. This framework would impose new responsibilities on businesses that use AI, including banks. Given this changing regulatory and technological context, it would be in the Bank’s interest to: • Demonstrate accountability and transparency; • Prevent legal, reputational and systemic risks; • Position itself as a prudent, ethical leader in adopting AI. Proactively publishing a structured report on the use of AI would allow shareholders to exercise informed oversight and enable the organization to build a corporate governance framework that is worthy of the trust of the public and authorities. This report should address the measures taken by the Bank to: • Promote transparency on how, why and when artificial intelligence is used; • Assess the results of AI systems (especially generative AI tools) to minimize biases and inaccuracies and allow users to distinguish between AI results and those generated by humans; • Train employees or contractors who develop or use AI to ensure they understand the legal, ethical and operational issues, including privacy, security and biases, and are able to adopt AI systems responsibly. (1) https://www.imf.org/en/Publications/fintech-notes/Issues/2023/08/18/ Generative-Artificial-Intelligence-in-Finance-Risk-Considerations-537570 (2) https://www.parl.ca/LegisInfo/en/bill/44-1/c-27

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