AI Risk Assessment Facilitation

Generative AI Risk Assessment Overview

Generative Artificial Intelligence (AI) refers to advanced technologies capable of creating human-like text, images, code, audio, video, and other digital content through machine learning models and algorithms. As organizations increasingly adopt these technologies to enhance productivity, operational efficiency, decision-making, customer service, and innovation, the use of generative AI is becoming commonplace across business functions.

In many cases, employees may already be utilizing publicly available AI tools to assist with business activities without formal organizational approval, oversight, or governance. While generative AI offers significant benefits, it also introduces unique risks related to data privacy, cybersecurity, regulatory compliance, intellectual property, model accuracy, bias, transparency, third-party dependencies, and operational resilience.

To maximize the benefits of generative AI while maintaining an acceptable risk posture, organizations should implement appropriate governance frameworks, policies, controls, and monitoring procedures. The adoption and use of generative AI should be based on a thorough assessment of potential risks and the effectiveness of mitigating controls.

Objective, Scope, and Methodology

NETBankAudit's Generative AI Risk Assessment is designed to help organizations identify, evaluate, and manage risks associated with the use, development, procurement, and governance of generative AI technologies. The assessment methodology is aligned with leading industry guidance and frameworks, including:

• NIST AI Risk Management Framework (AI RMF)
• NIST Cybersecurity Framework (CSF)
• Microsoft Security and Responsible AI guidance
• U.S. Department of the Treasury guidance on AI governance and risk management
• Industry regulatory and compliance expectations applicable to financial institutions and other regulated organizations

Through interviews with management and key stakeholders, review of relevant documentation, and evaluation of existing governance and control environments, NETBankAudit facilitates a structured assessment of the organization's current or planned use of generative AI.

The assessment evaluates inherent risk, control effectiveness, and residual risk while identifying opportunities to strengthen governance and oversight in the following areas:

Governance and Strategy

• AI governance structure
• Roles and responsibilities
• AI policies and standards
• Risk appetite and oversight processes
• Acceptable use requirements

Threat and Security Environment

• Cybersecurity risks
• Prompt injection and model manipulation
• Data leakage and unauthorized disclosure
• Third-party AI service risks
• Monitoring and incident response capabilities

Vendor and Third-Party Risk Management

• AI vendor due diligence
• Contractual protections
• Security and privacy controls
• Model transparency and explainability
• Ongoing vendor oversight

Data Governance and Privacy

• Data classification and handling
• Confidential and customer information protection
• Data retention practices
• Privacy considerations
• Data quality and integrity controls

AI Models and Operations

• Model selection and approval processes
• Accuracy, reliability, and bias management
• Human oversight and review procedures
• Model performance monitoring
• Change management controls

Resiliency and Business Continuity

• Service availability considerations
• Dependency management
• Business continuity planning
• Recovery and contingency procedures

Compliance and Regulatory Considerations

• Regulatory expectations
• Legal and contractual obligations
• Intellectual property considerations
• Record retention requirements
• Regulatory reporting and governance practices

Deliverables

Upon completion, NETBankAudit will provide:

Generative AI Risk Assessment Workbook

A comprehensive workbook documenting:

• Risks identified
• Control evaluations
• Risk ratings
• Gap analysis
• Recommended mitigation activities

Executive Management Report

A detailed report summarizing:

• Assessment methodology
• Key observations
• Risk ratings
• Areas of strength
• Control deficiencies
• Prioritized recommendations for improvement

AI Governance and Policy Template

A customizable policy template to assist management in establishing formal governance, acceptable use standards, and control requirements for the use of generative AI technologies throughout the organization.

Strategic Roadmap

A practical roadmap outlining recommended next steps and risk-based priorities for strengthening the organization's AI governance, security, compliance, and operational maturity.