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White paperMichael Clark
One Model, Two Inventories
A bank's SS1/23 model inventory classifies models by materiality to the firm, while the AI Act classifies systems by what they are used to do to a person, so the two capture different populations. The exposure sits in the fourth quadrant: systems outside the model inventory that make or shape decisions about people, whose AI Act position has to be established use by use and which no function owns. We recommend one record of facts with two views, discovery through suppliers, spend, code and a survey, and decision records captured from the start, because they cannot be built retrospectively.
Key findings
- SS1/23 classifies by materiality to the firm and the AI Act by what a system is used to do to a person, so the two produce different populations.
- The exposure sits in the fourth quadrant: systems outside the model inventory that make or shape decisions about people, which no function has on a list.
- The fourth quadrant's AI Act position is set use by use: recruitment screening and creditworthiness evaluation are named high-risk uses; financial crime triage and next best action are not.
In the paper
- Different classification bases
- Four quadrants
- Position by use, not by quadrant
- Nobody owns it
- One record, two views
- The record that cannot be rebuilt
Michael Clark
Chief Executive Officer, Standard Intelligence
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