Between the requirements of the CSSF and the ECB, as well as the European framework encompassing the AI Act, DORA, and the GDPR, financial institutions must navigate a paradox: leveraging AI while operating in one of the most heavily regulated environments imaginable. Michel Goffin, Territory Director for Belgium, Germany, and Luxembourg at AMEXIO, breaks down the challenges.
“The widespread adoption of AI across all business lines—scoring, KYC, AML, fraud, and trading—amplifies risks: data breaches, bias, uncontrolled automated decisions, and reliance on opaque models,” he explains. Models used for credit, AML, or fraud are classified as “high-risk” under the AI Act—a classification that requires documentation, records, controls, and explainability.
In light of these challenges, robust governance is no longer an option. “Through governance, the company will define authorized tools, usable data, validation processes, and documentation requirements,” explains Michel Goffin. It also helps prevent risky practices (such as employees using external models whose terms and conditions permit training on customer data) while ensuring traceability, human oversight, and alignment with CSSF, GDPR, and AI Act requirements.
It is precisely on these foundations that IBM’s watsonx platform was built. Alongside watsonx.orchestrator, which is dedicated to orchestrating AI models and processes, the watsonx.governance module ensures risk oversight and regulatory compliance. “The environment we offer is AI Act-ready. It includes a model registry, implements automatic documentation, and ensures full traceability, risk management, and data control,” explains Michel Goffin. Every activity is logged, audited, and exportable for the CSSF or the ECB, whether it involves traditional models, LLMs, or open-source solutions.
As a result, banks, insurance companies, financial service providers (PSFs), and Luxembourg-based funds can deploy AI (on-premises or in a controlled environment) in full compliance with the AI Act, GDPR, DORA, and CSSF regulations, while retaining control over their data.
To learn more, read the full article on ITnation: https://itnation.lu/news/la-gouvernance-de-lia-un-enjeu-cle-pour-les-acteurs-du-secteur-financier/