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Magazine
Unveiling The Hidden AI Failures Beyond The Hype
Naresh Raheja explores the operational, governance, and compliance risks hidden beneath the promise of artificial intelligence. Drawing on failures across multiple industries, he highlights risks including hallucinations, algorithmic bias, automation bias, data leakage, and unreliable outputs. The article argues that institutions must focus on reliability and governance rather than capability alone, particularly as AI becomes embedded within critical banking processes and decision-making frameworks.
Jun 23, 2026
Naresh Raheja, Former Senior Risk Specialist, OCC
Tags:
AI and Technology (including Fintech)
Model risk
The views and opinions expressed in this content are those of the thought leader as an individual and are not attributed to CeFPro or any other organization
- AI capability does not
guarantee reliability
- Hallucinations and bias create
significant risks
- Governance challenges are
increasing
- Human oversight remains
essential
- Banks must learn from failures
in other sectors
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