Chief, Czar, or Committee: Who Rules Over AI?

If artificial intelligence ultimately fulfills analysts’ projections and proponents’ expectations, it’s not just the rank-and-file workforce that must evolve and likely have to be upskilled. Adjustments will be required all the way up to the top, an all-important one addressing senior-level oversight and governance of the burgeoning technology and its extensive organizational reach.

Although AI is a fundamentally technological innovation, its applications can be both transformative and democratizing, promising enhanced productivity and immense returns on investments, while also having to be forthrightly risk-managed and controlled particularly in regulated industries such as finance.

Survey data from Gartner shows accountability for AI being assigned to a wide range of executive positions, with chief information officers (CIOs) garnering a 25% plurality.

As for AI funding, CIO and chief technology officer (CTO) budgets account for a combined 27%, business unit or function budgets for 19%.

In Deloitte’s 2024 Chief Legal Officer Strategy Survey, CLOs’ decision-making influence over generative AI in the C-suite was found to be just behind that of CEOs and CIOs/CTOs in the U.S. and Europe. (CLOs were tied with CIOs/CTOs in Australia, but ranked sixth in Canada.) Ninety-three percent of the legal officers were optimistic about GenAI delivering value to their organizations over the next 12 months.

“We have spoken to hundreds of clients, and it is quite a large spectrum of personnel who have been selected to lead AI initiatives,” comments Frances Karamouzis, group chief of research and distinguished analyst at Gartner. “They hail from various areas of IT teams, such as applications, software engineering, infrastructure and operations, to digital business leaders or analytics and data science professionals. At times, it may be the CIO or CTO, or digital business leader.”

On July 1, in a still unusual move for a financial services organization, AllianceBernstein (AB) appointed Andrew Chin, a former chief risk officer of the asset management firm, as its first chief artificial intelligence officer.

The era of the CAIO may be dawning.

Appointed Chiefs

This new “C” title may be a case of the often early-adopting financial sector – or at least the private-sector part of it – not being at the forefront.

Gil Alterovitz was inaugural AI director at the U.S. Department of Veterans Affairs in 2019. U.S. Air Force chief data officer Eileen Vidrine served as that department’s chief AI officer from January 2023 until her March 2024 retirement.

The Department of Health and Human Services advertised for a CAIO this summer.

Last September, Mark Daley was appointed CAIO at Western University in London, Ontario, Canada. In May 2024, Williams Luxury Homes claimed to be the first real estate firm with a CAIO, Aaron Auxier

The growing interest in the role led David Mathison, who hosts annual CDO Summits, to start the CAIO Summit.

Treasury, CFTC, CISA

In January, the U.S. Treasury Department named Todd Conklin CAIO; he is also deputy assistant secretary of cyber.

On May 1, the Commodity Futures Trading Commission announced that chief data officer Ted Kaouk was re-titled chief data and AI officer. This came amid what CFTC Chairman Rostin Behnam termed “efforts to deploy an enterprise data and artificial intelligence strategy to modernize staff skillsets, instill a data-driven culture, and begin to leverage the efficiencies of AI as an innovative financial markets regulator.”

The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency said August 1 that it promoted Lisa Einstein from a senior advisory position to CAIO, “reflect[ing] CISA’s commitment to responsibly use AI to advance its cyber defense mission and to support critical infrastructure owners and operators across the United States in the safe and secure development and adoption of AI.”

“Critical and Transformative”

Andrew Chin, a 27-year AllianceBernstein veteran, in addition to more than a decade as the firm’s CRO, had also served as head of quantitative research, chief data scientist and, most recently, head of investment solutions and sciences.

AllianceBernstein CAIO Andrew Chin

“As AI continues to play a critical and transformative role in enhancing AB’s investment-research, operational and business procedures, and improving efficiencies across our corporate functions, we look forward to having an industry veteran like Andrew lead our firm into the future in this newly created role,” chief operating officer Karl Sprules said in a statement.

The CAIO role, Chin said, “signifies the evolution of not only my career path at AB, but the broadening role that data science and AI are playing across the financial services industry. I look forward to continually collaborating with teams and leaders throughout the organization to harness the power of AI to ultimately deliver better outcomes for our clients.”

Wide Range of Uses – and Hazards

Thomas P. Vartanian, a longtime financial industry lawyer, author most recently of The Unhackable Internet, and executive director of the Financial Technology & Cybersecurity Center, points to the breadth of AI deployments including compliance, risk management, financial modeling, underwriting, marketing and data aggregation.

At the same time, generative AI raises the specter of increased fraud and misinformation, which AI technology in turn is being enlisted to combat.

Vartanian says finding or grooming individuals to lead across all of these areas is a tall order, especially for smaller firms at a time of heightened competition for experienced talent with knowledge of, or a feel for, regulation, technology, cybersecurity and, of course, financial services.

Analytics and Communication

A top need is for professionals with experience in decision analytics, says Robert M. Iommazzo, managing director and global practice leader, enterprise risk analytics, at ZRG Partners. Candidates should have a STEM-based educational degree and some engineering experience.

“Communication is critical,” he adds. “This role is largely going to serve as reassurance to employees” regarding business goals and how the technology can help achieve them.

Carl Gargula, executive vice president at Risk Talent Associates, says large financial services enterprises seek combinations of computer science experience, data science skills and business acumen. Ideal candidates have risen through the ranks in an engineering or AI capacity.

Big Steps Up

Smaller firms might try to hire or promote someone into the CAIO role in order to position themselves competitively. While it is challenging to find anyone with every desired skill, a manager at the business-unit level is likely to have less direct AI experience.

Gartner analyst Frances Karamouzis

Gargula also stresses the importance of communication and interpersonal skills, as the AI leader will have to collaborate with officers in virtually all business lines and departments.

Regardless of title, most in AI leadership roles have probably been in them for less than a year, and many lack C-suite experience, according to Gartner’s Karamouzis. The sheer number of disciplines that must be coordinated and managed makes the category, by definition, immature. It requires attention to such areas of focus as strategy- and culture-building, pursuing and demonstrating quantifiable business value, a scalable and resilient technical architecture, and risk identification and mitigation.

Per Gartner research, AI leaders are often expected to be change agents, but they may not have access to dedicated resources and a clear span of control, Karamouzis says.

“In short, there is no source of training or playbook,” the analyst adds. “It’s all new.”