Artificial Intelligence: Privacy Risk

Artificial Intelligence (AI) is the future and that comes with a lot of pros as well as cons, even in the regulatory compliance space. While the cons aren’t necessarily to be feared, awareness is key in order to mitigate any potential risks. One very real risk that may be a blind spot for many institutions is privacy. If employees are entering nonpublic personal information about your consumer customers into open-source public AI platforms, like ChatGPT, etc., that information is often retained and used by that AI platform which would likely not be in line with your privacy practices.

Regulation P governs how institutions can share nonpublic personal information to nonaffiliated third parties. It requires institutions to:

• …provide notice to customers about its privacy policies and practices;
• Describe the conditions under which a financial institution may disclose nonpublic personal information about consumers to nonaffiliated third parties; and,
• Provide a method for consumers to prevent a financial institution from disclosing that information to most nonaffiliated third parties by "opting out" of that disclosure, subject to the exceptions in §§1016.13, 1016.14, and 1016.15.

To learn more, be sure and check out our Privacy webinar, which is available now OnDemand.

One attendee shared that this webinar had great information and the privacy notice is something institutions sometimes forget to update when they should. Another liked how we walked through the privacy notice in order, step by step.

Published 2026/11/08