By starting with policies, controls, and proactive risk management, community banks and credit unions can enter the AI era with confidence.
The artificial intelligence (AI) revolution isn’t coming — it’s already here. From automated customer support to fraud detection, AI tools are quickly becoming embedded in financial services.
While the potential for increased efficiency and deeper insights is exciting, it also brings a pressing need for structure, control, and foresight. Unfortunately, many banks and credit unions are navigating this shift without a clear roadmap.
Learn how your financial institution should prepare before implementing AI.
Financial institutions should consider AI policies early
One of the most common pitfalls financial institutions face when exploring AI is assuming oversight can come later. But in today’s digital environment, where employees can access powerful AI tools directly in their browsers and vendors may embed AI into their products without clear disclosure, waiting can lead to significant risk.
Before your institution adopts AI tools, and even before you formally approve their use, you should update your internal policies.
Create and implement an AI policy
A standalone AI policy is essential. It should outline:
- What AI tools employees can use
- How and where AI can be used (for example, for internal tasks but not in customer-facing communications)
- What data is off-limits, especially sensitive customer or proprietary institutional information
- Who is responsible for oversight, updates, and accountability
Even if your institution isn’t officially deploying AI, your employees or vendors might be. Without clear expectations, your organization could be exposed to unnecessary risks.
Update your acceptable use policy (AUP)
Acceptable use policies should reflect AI tools like ChatGPT, Gemini, and Copilot are widely available and easy to access. Make it clear:
- Whether employees are allowed to use publicly accessible AI tools
- What types of data, if any, are permitted to be entered into these tools
- What approval processes exist for using AI-powered applications
If these tools aren’t explicitly addressed in your AUP, it’s safe to assume they are already being used without proper oversight.
Control your data before it leaves your organization
AI systems thrive on data, but so do hackers and fraudsters. Institutions must enforce strong data protection practices, including:
- Technical controls to prevent sensitive information from being entered into unsecured AI platforms
- Data loss prevention tools to flag and block unauthorized data transfers
- Employee training to raise awareness about the risks of sharing institutional or customer data with AI tools, even unintentionally
This is not just about stopping malicious activity. It’s about preventing well-meaning staff from accidentally causing a compliance breach or data exposure.
Scrutinize how your vendors use AI
Third-party risk continues to grow, and in many cases, vendors are incorporating AI into tools without clearly communicating the implications. This creates potential blind spots for financial institutions.
Ask your vendors the following questions:
- Are you using AI in your product or service?
- What data is used to train your models?
- Is customer data involved in any AI-related processes?
- What controls are in place to protect data and verify regulatory compliance?
These discussions need to be part of your vendor management and due diligence processes. They should not be an afterthought once issues arise.
Bridging the gap without formal guidance
It’s tempting to wait for regulators or industry bodies to release formal guidance, but those guardrails are still evolving. In the meantime, institutions are left to manage growing exposure and rising expectations on their own.
Regulators are watching, cybercriminals are testing, employees are experimenting, and your customers expect both security and innovation. Choosing to do nothing is no longer an option.
How financial institutions can start with AI protections
Here’s where your institution can begin today:
- Draft or update an AI policy reflecting your current and future environment
- Revise your acceptable use policy to include generative AI and emerging tools
- Strengthen data governance and access controls to protect institutional and customer data
- Enhance due diligence to evaluate how vendors use AI on your behalf
- Educate your employees to build awareness and accountability across the organization
Future-ready begins with policy
AI is not just another tech trend. It represents a foundational change in how institutions operate, engage, and grow. Like any powerful tool, it must be managed carefully and responsibly.
By starting with policies, controls, and a proactive approach to risk management, community banks and credit unions can enter the AI era with confidence. You can innovate while staying secure, compliant, and aligned with your mission.
You don’t need to have all the answers today. But you do need to start. Let policy be your first step.
How CLA can help with AI protections for financial institutions
At CLA, we know understanding new technology can feel overwhelming, especially with the rapid emergence of AI, automation, and data-driven technologies. Our digital team can help financial institutions cut through the noise.
We assist in crafting practical, secure, and scalable strategies aligning with your institution’s goals while addressing regulatory expectations, third-party risk, and data protection. Whether you're drafting your first AI policy, revisiting acceptable use guidelines, assessing vendor technology, or seeking clarity on how to adopt new tools responsibly, CLA provides the guidance, structure, and technical experience to help you move forward with confidence.