Why Gen AI Demands a New Approach to Risk and Governance in Finance

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Outdated Risk Models Are Slowing Gen AI in Finance - Here’s What Needs to Change

As Gen AI transforms financial services, outdated risk models and governance frameworks are stalling adoption. A shift toward outcomes-based validation is essential to move from legacy systems to AI-ready infrastructure.

Apr 07, 2025

Mehdi Esmail, Cofounder & Chief Product Officer, ValidMind

Tags: AI and Technology (including Fintech)

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

The financial industry is facing a major inflection point in how it approaches governance for generative AI. Legacy risk frameworks - built for classical models - fall short in addressing Gen AI’s complexity. Institutions must treat

Gen AI is more like an application than a standalone model, prioritizing outcomes-based validation over conceptual soundness. With AI models evolving at a breakneck pace, continuous learning and industry collaboration are key to staying ahead.

Tools like ValidMind are helping bridge the gap by streamlining governance across all three lines of defense.

Mehdi Esmail Bio

Mehdi is Cofounder & Chief Product Officer at ValidMind, a startup focused on AI and model risk management for financial institutions. Previously, Mehdi was VP of Product at Zenon.ai, a solution focused on Al-enabled automation for financial services, healthcare, and tech focused B2B. Prior to founding ValidMind, he was Chief of Staff to the CDAO at AMEX and Analytics consultant at Booz Allen.