Ariath glossary: AI Governance
The set of policies, processes and oversight a firm uses to make sure AI is used responsibly. It typically covers which tools and models are approved, who can use them and for what, how data is handled, how output is reviewed, and what records are kept.
In brief
- What it does
- Sets the policies, approvals and oversight for how a firm uses AI.
- How it differs from compliance
- Governance is the firm's own management of AI use. Compliance is meeting the requirements that apply to the firm.
- What it needs in a wealth management firm
- Clear ownership, written policies, an inventory of approved tools, and review of AI-assisted work.
How it works
How AI governance works
AI governance is usually an ongoing cycle rather than a one-time project:
Inventory AI use
The firm lists the AI tools, models and workflows in use or under consideration.
Set policies and approvals
The firm decides what is approved, who can use it, and which data it may touch.
Apply controls
Access, data handling, logging and retention settings are configured to match the policies.
Monitor and review
The firm reviews AI-assisted work and the records behind it, and updates its policies as use and requirements change.
For an RIA, governance connects AI use to the firm's existing policies, supervision and recordkeeping.
Governance sets the rules for AI use. Tools can help apply them, but the policies and the oversight belong to the firm.
Comparison
AI governance vs. AI compliance
The terms overlap in conversation, but they are not the same thing.
AI governance
A firm's own policies, processes and oversight for how AI is used, from approved tools to review of output.
For example
Approving a list of models and deciding who reviews AI-assisted drafts before they go out.
AI compliance
Meeting the laws and regulations that apply to a firm. Those requirements depend on the firm and can change over time.
For example
A firm confirming with counsel how its recordkeeping obligations apply to an AI-assisted workflow.
Governance can support a firm's compliance work, but a governance control does not by itself establish that a firm meets any requirement. Confirm the specifics with your compliance lead or counsel.
In practice
AI governance examples in wealth management
Governance shows up as concrete decisions about tools, data and review. These examples are illustrative.
Approved models
Deciding which AI models the firm has approved and which users may access them.
Workflow-level settings
Setting different controls for different workflows, such as onboarding and proposals.
Data handling rules
Deciding which client fields should be masked or kept out of a workflow.
Output review
Defining who reviews AI-assisted work before it reaches a client.
Records and retention
Deciding what is recorded about AI-assisted tasks and how long it is kept.
Governance is a decision the firm makes. Software can support it with configurable controls, but those controls do not replace the firm's own policies, supervision or legal counsel.
What it needs
What AI governance needs to work
Governance works when responsibilities and practices are explicit. Firms typically define:
- Clear ownership and accountability
- A written policy for AI use
- An inventory of approved tools and models
- Access and data-handling controls
- Review of AI-assisted output
- Logging, retention and periodic review
These are firm decisions. Requirements differ by firm and change over time, so confirm the specifics with your compliance lead or counsel.
In Ariath
Ariath documents governance settings that are set per workflow, so different workflows can run under different controls. The AI compliance page maps each control to a question a review can ask.
Common questions
Frequently asked questions about AI governance
Does AI governance mean legal compliance?
No. Governance is how a firm manages its own use of AI. Whether a practice meets a legal requirement is a question for the firm's compliance lead or counsel.
Who owns AI governance in an RIA?
It varies by firm. It often involves compliance, operations and firm leadership, and the firm decides who is accountable.
Can software provide AI governance?
Software can provide configurable controls, such as access settings, redaction, audit records and approved model lists. The policies behind those settings, and the review of AI output, remain the firm's responsibility.
This entry is educational. It is not legal or compliance advice and does not guarantee regulatory compliance. Confirm the requirements that apply to your firm with your compliance lead or counsel.
Give AI the context it needs to act
Ariath connects your CRM, custodian and planning tools into one governed context, with your firm in control of how data is accessed and used.