From Internal Standards to the AI Act: Reshaping Financial Processes for the Era of Algorithmic Accountability

Abstract

This paper looks at how internal governance in financial institutions changes as the sector moves from voluntary standards to the mandatory EU AI Act. It traces the path from the traditional “duty of care” to what could be called “algorithmic accountability”. The argument is that as Agentic AI takes over cognitive workflows such as AML monitoring and risk management, the traditional focus on human behaviour becomes less relevant. The paper proposes the concept of “Algorithmic Hygiene” as a way of describing the continuous oversight of how software is configured and how it performs. The conclusion is that institutional stability now depends ongoing beyond formal “tickthe-box” compliance toward a real technical audit of an institution’s “algorithmic DNA”.