From FedScoop, November 6:
The Fed is looking to test concepts in areas that consume and generate a lot of data — such as payment rails and supervision and regulation.
While some agencies in the public sector have pumped the breaks on the use of generative artificial intelligence, the Federal Reserve System has set up a generative AI incubator, looking to be “bold” but responsible in its use of the technology, according to the agency’s chief innovator.
The generative AI incubator takes the private sector concept and a bias toward action and marries it with the need to be responsible and manage risk, Sunayna Tuteja, chief innovation officer of the Federal Reserve System, said last week at the “Federal Innovation Series: Leading in the Era of AI” event, presented by Microsoft and FedScoop.
“At the Fed we’re really good at, you know, writing white papers and thinking, and thinking about thinking about thinking more,” Tuteja said. But with generative AI, “this is one of those technologies where you have to think but you also have to do, so how do we create a framework that enables us to do that?”
Tuteja’s comments came just after President Joe Biden signed a landmark executive order on AI and the Office of Management and Budget issued guidance to agencies on the use of the technology and, among other things, evaluate potential applications of generative AI.
Tuteja looked back on her experience in the private sector at TD Ameritrade, prior to joining the Fed in 2021, where incubators are fairly common as inspiration for the idea, she said.
“In the private sector, we used to say: Go from idea to IPO — the Fed doesn’t let you IPO obviously, so for the Fed it is how do we go from idea to implementation,” she said of incubators. “And the reason this construct is helpful is it really enables us to interrogate this technology, but through this eclectic combo of the bold and the boring. In order for us to do big, baller, bold things, it actually requires us to do a lot of important boring things in a very consistent manner.”
While Tuteja didn’t speak to any specific examples of generative AI concepts being tested in the incubator currently, she pointed to areas that consume and generate a lot of data as the best places to start — such as payment rails and supervision and regulation.
“These payment rails consume a lot of data, but they also generate a lot of data. So the way we’re applying generative AI is really as we look at all the data that’s coming from our ACH payment rails or FedNow or cash, the usage statistics, etc., how do we now take this … how do we apply the right models so that we can extract insights that enables us to make decisions not just from … an investment perspective, but also from a customer experience perspective, really understanding which payment rail does the customer want to use, at what time, for what purpose and kind of align our business decisions accordingly,” she said, adding that the goal is to augment and turbocharge the work humans are doing....
....MUCH MORE
She sounds like she knows what she wants out of the tech. And a lot less starry-eyed than most potential end users.
Here's her LinkedIn page.
