As financial institutions increasingly automate compliance using AI, the challenge of transparency and accountability arises, particularly due to the “black box” nature of many models. Explainable AI could provide the necessary clarity, helping to ensure that AI-driven decisions are understandable and justifiable, thus bridging the gap between innovation and regulatory requirements.
California has enacted new AI safety and transparency laws, requiring businesses to provide pre-use notices and conduct risk assessments when using automated decision-making technologies. Meanwhile, Governor Newsom vetoed the ‘No Robo Bosses Act’, citing concerns over its ambiguity and potential impact on innocuous administrative tools.
On September 29, 2025, California Governor Gavin Newsom signed the Transparency in Frontier Artificial Intelligence Act into law, establishing a comprehensive framework for transparency and accountability in AI development. This landmark legislation mandates large frontier developers to implement a Frontier AI Framework and publish transparency reports, ensuring risks are identified and mitigated effectively.
The EU AI Act introduces a new transparency framework that challenges traditional trade secret protections by requiring AI developers to disclose detailed information about their systems. As companies navigate the tension between compliance and confidentiality, they must strategically manage transparency to protect their competitive edge.
As AI systems become more integrated into critical decision-making processes, they raise complex ethical challenges that necessitate robust governance to ensure fairness and accountability. Organizations must navigate the tension between transparency and the protection of sensitive information while fostering public trust in AI outcomes.
On September 29, 2025, California Governor Gavin Newsom signed the Transparency in Frontier Artificial Intelligence Act (SB 53), establishing requirements for safety disclosures from developers of advanced AI models. This law aims to enhance transparency and accountability, particularly for models that pose catastrophic risks, with most provisions taking effect on January 1, 2026.
California has enacted the nation’s first law regulating frontier artificial intelligence, known as the Transparency in Frontier Artificial Intelligence Act (TFAIA), which mandates large AI developers to publish safety frameworks and report critical safety incidents. The law aims to balance innovation with necessary safeguards to ensure public safety and accountability in AI development.
On September 29, 2025, California Governor Gavin Newsom signed Senate Bill 53, the Transparency in Frontier Artificial Intelligence Act, which requires large AI developers to publicly disclose safety frameworks and transparency reports about their models. This legislation aims to enhance accountability and safety in AI development while establishing whistleblower protections for employees in the field.
On September 29, California Governor Gavin Newsom signed into law the Transparency in Frontier Artificial Intelligence Act, making California the first state to mandate public safety disclosures from developers of advanced AI models. The law aims to enhance transparency and accountability among large AI developers, requiring them to disclose safety risk management practices and report critical safety incidents.
California lawmakers have passed a landmark AI transparency law, the Transparency in Frontier Artificial Intelligence Act (SB 53), aimed at enhancing accountability and public trust in advanced AI systems. This legislation establishes new requirements for transparency and risk governance while fostering innovation and protecting civil rights.