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Guide to build your AI framework and Maturity assessment
A Practical Guide for Finance, Risk, and Governance Leaders
Executive Summary
As AI becomes embedded in enterprise workflows, the focus is shifting from innovation to governance. Boards, auditors, and regulators are no longer satisfied with proof of adoption, they are asking: Is it governed? Is it explainable? Is it defensible?
This paper presents a structured, end-to-end AI Control Framework tailored for finance and risk leaders, drawing on global guidance including the OECD AI Principles, NIST AI Risk Management Framework, ISO/IEC 42001, EU AI Act, and UK AI Regulation Principles.
It supports organisations in deploying deterministic, predictive, generative, or agentic AI with control confidence, ensuring risk is managed and value is realised.
The Case for an AI Control Framework
AI brings decisions closer to the machine, from invoice approvals to credit scoring, risk tiering, and customer interaction. This shift demands a reimagining of control design.
Traditional controls (e.g., approvals, reconciliations, SoD reviews) were built around human workflows. AI displaces these, automating judgment, adapting logic, and interacting with live data in real time. That means:
  • Explainability replaces manual sign-off
  • Traceability replaces audit trails
  • Ownership and override governance become control activities
To assure this new reality, a unified control framework must answer: What is the AI doing? Who is accountable for outcomes? Can we trust it, and prove it?
Framework Design Principles
An effective AI Control Framework must be built on solid principles that ensure its relevance, applicability, and sustainability across the organization.
Risk-aligned
Tailored to the AI system's criticality and potential for harm
Technology-agnostic
Works across predictive, generative, and agentic models
Embedded
Built into design, not retrofitted after deployment
Auditable
Supports evidence-based walkthroughs with clear documentation and ownership
Scalable
Adaptable to evolving use cases, regulations, and control maturity levels
The AI System Lifecycle
We align AI governance with a lifecycle approach, where each stage includes critical control anchors to ensure comprehensive oversight.
1
Business Use Case Design
Risk classification, owner assignment, expected outcomes, risk tolerance definition
2
Data Collection & Processing
Data lineage, source validation, privacy assurance, data governance role clarity
3
Model Development & Testing
Explainability thresholds, fairness checks, testing documentation, regulatory compliance validation
The AI System Lifecycle (Continued)
1
Deployment
Approval logs, threshold configuration, business sign-off, change control
2
Monitoring & Feedback
Override governance, model drift tracking, retraining controls, real-time dashboards
3
Retirement/Replacement
Decommissioning logs, model archive controls, transition handoffs
Each stage of the lifecycle requires specific controls and governance mechanisms to ensure that AI systems remain aligned with business objectives, regulatory requirements, and risk tolerance levels. By embedding controls throughout the lifecycle, organizations can maintain oversight from conception to retirement.
AI Control Categories Overview
The control framework spans seven interdependent categories. These ensure that every AI system, whether deterministic or autonomous, operates with clarity, accountability, and compliance.
  • Use Case Inventory & Ownership
  • Data Governance & Lineage
  • Explainability & Model Transparency
  • Performance Monitoring & Drift Management
  • Override Governance & Feedback Loops
  • Access Controls & Security
  • Auditability & Evidence by Design
These categories work together to create a comprehensive control environment that addresses the unique challenges posed by AI systems while aligning with traditional governance structures.
Use Case Inventory & Ownership
What is being done, and who is responsible?
A foundational element of AI governance is maintaining clear visibility and accountability for all AI systems within the organization.
Centralized Inventory
Maintain a centralized inventory of AI use cases across business processes.
Risk Classification
Classify each by risk tier, decision criticality, and financial impact.
Ownership Assignment
Assign a named business owner accountable for model performance and decisions.
Governance Oversight
Confirm ownership in walkthroughs, control sign-offs, and quarterly governance reviews.
Example Controls: AI use case registry with metadata, ownership attestation and accountability sign-off, governance body oversight (e.g., AI Steering Committee).
Data Governance & Lineage
Can we trace every input to a known source, owner, and validation point?
Effective AI governance requires complete visibility into the data that powers AI systems, from source to decision.
  • Establish full data lineage: source system, owner, and last validation date.
  • Ensure traceability of all model input data, including third-party feeds.
  • Track data quality and reconciliation as part of financial control frameworks.
  • Align with privacy regulations (e.g., GDPR, UK DPA 2018).
Example Controls: Data ownership register, lineage diagrams integrated with metadata catalogues, privacy impact assessments, reconciliation logs and data quality dashboards.
Explainability & Model Transparency
Can we explain AI behaviour in human terms?
For AI to be trusted and governed effectively, its decisions must be understandable to both technical and non-technical stakeholders.
Key Requirements
  • Translate model logic into interpretable business rationale.
  • Define explainability requirements based on model impact.
  • Integrate decision context into user interfaces.
  • Test explanations for accuracy and user comprehension.
Example Controls
  • Model cards and explainability thresholds
  • Business-focused decision rules surfaced in UI
  • Human-in-the-loop validation of explanations
  • Logging of input–score–decision flow
Explainability is not just a technical requirement—it's a business necessity that enables stakeholders to understand, trust, and effectively govern AI-driven decisions.
Performance Monitoring & Drift Management
Is the model still performing as expected, and how do we know?
AI models can degrade over time as data patterns change. Robust monitoring ensures continued performance and reliability.
Performance Tracking
Track false positives/negatives, anomaly volumes, and confidence intervals.
Drift Thresholds
Establish acceptable drift thresholds based on business risk.
Alert Protocols
Define alert protocols when models deviate from expected behavior.
Retraining Governance
Log and govern retraining decisions through formal change control.
Example Controls: Model monitoring dashboards, quarterly performance reports to risk/audit, drift threshold documentation, retraining logs and approvals.
Override Governance & Feedback Loops
When humans intervene, is it structured, logged, and used to improve the system?
Human oversight remains essential in AI systems, but interventions must be governed to maintain control integrity.
Effective override governance requires structured processes that capture not just the fact of an intervention, but the reasoning behind it and how that information feeds back into system improvement.
By treating overrides as valuable data points rather than exceptions, organizations can continuously refine their AI systems while maintaining appropriate human judgment.
Key Requirements
  • Require users to provide structured override reason codes.
  • Log who, when, and why for each manual intervention.
  • Periodically review override patterns and integrate into model tuning.
Example Controls
  • Override logging system
  • Monthly exception reviews led by Finance or Internal Audit
  • Feedback loop documentation
Access Controls & Security
Who can influence the system, and is that access reviewed?
AI systems require specialized access controls that reflect their unique capabilities and risks.
  • Limit override, retraining, and configuration access based on roles.
  • Align with SoD protocols and broader ITGCs.
  • Perform quarterly access reviews and embed in control attestations.
Example Controls: Role-based access matrix, SoD violation alerting, quarterly access review sign-offs.
By implementing robust access controls, organizations can prevent unauthorized modifications to AI systems while maintaining appropriate separation of duties and governance oversight.
Auditability & Evidence by Design
Can we prove what happened, without reconstruction?
AI systems must be designed from the ground up to support audit and compliance requirements.
Comprehensive Logging
Ensure every model-influenced decision is logged: input, output, thresholds, outcome.
Tamper-Evident Records
Archive records in tamper-evident, exportable formats.
Audit-Ready Evidence
Create evidence packs or governance notes pre-aligned to audit walkthroughs.
Example Controls: Immutable audit logs, decision journals (AI + human), pre-configured audit evidence views, model lifecycle documentation.
By embedding auditability into AI systems from the start, organizations can reduce compliance overhead and increase confidence in their governance processes.
Alignment with Global AI Governance Frameworks
A well-designed AI control framework does more than protect your business, it positions you to demonstrate compliance across the evolving patchwork of global standards.
This section maps the control categories to key governance principles from internationally recognized frameworks, focusing on practical alignment with:
  • OECD AI Principles
  • EU AI Act (2024 final text)
  • ISO/IEC 42001: AI Management System Standard
  • NIST AI Risk Management Framework (RMF)
  • UK Government Digital Principles (AI updates)
Regulatory Application Notes
Understanding the nuances of each regulatory framework helps organizations tailor their control implementation effectively.
OECD AI Principles (2019)
Focuses on AI that is innovative and trustworthy, with principles around human-centered values, transparency, robustness, and accountability. It underpins many regional laws and is a reference point for G7/G20 discussions.
EU AI Act (2024)
Legally binding across the EU. Requires risk-based controls for "high-risk" AI systems (including those used in financial controls, payment fraud, credit scoring). Mandatory documentation, conformity assessments, and human oversight feature prominently.
ISO/IEC 42001
First formal AI Management System Standard (AIMS). Offers process-based requirements (similar to ISO 27001) with emphasis on governance structures, data and model management, and continual improvement cycles.
NIST AI RMF (2023)
US-aligned, voluntary framework used globally for internal risk management alignment. Divided into core functions: Map, Measure, Manage, and Govern, it supports design-stage through deployment assurance.
UK Digital Principles (2024)
Encourages responsible design and use of AI in government and regulated sectors, including expectations for transparency, fairness, and the embedding of accountability at procurement and use stages.
Implications for Audit and Compliance
A mapped control framework allows organizations to:
  • Pre-empt regulator expectations without re-engineering controls.
  • Demonstrate cross-framework traceability for multi-jurisdictional operations.
  • Consolidate assurance efforts for external audit, internal audit, and second line reviews.
  • Show leadership by building an AI ecosystem that's trustworthy by design, not post-hoc.
Framework Mapping Example
Understanding how control categories align with global frameworks helps organizations build compliance by design.
By mapping controls to these frameworks, organizations can build a unified approach that satisfies multiple regulatory requirements simultaneously, reducing duplication of effort and ensuring comprehensive coverage.
AI Risk and Control Matrix
This section provides a practical mapping of risks associated with AI-enabled processes and the corresponding control objectives and examples that organizations can adopt or tailor.
It is designed to help compliance leaders, risk officers, internal auditors, and technology teams implement structured governance aligned with international frameworks.
How to Use the Matrix:
  • Internal Audit: Use the matrix to design walkthroughs and testing procedures that evaluate AI control design and effectiveness.
  • Risk and Compliance: Adapt controls into your policy frameworks (e.g., SOX, UKCR, or EU AI compliance).
  • Business and Tech Leads: Implement these controls during the AI lifecycle, from development to deployment and monitoring.
Risk and Control Matrix Example
Implementation Roadmap
Designing and implementing an AI Control Framework is not a one-time exercise. It requires a staged, intentional journey, tailored to your organization's current capabilities, risk appetite, and regulatory obligations.
Below is a suggested roadmap with progressive maturity levels that organizations can follow to develop and enhance their AI governance capabilities over time.
This phased approach allows organizations to build capabilities incrementally, focusing on foundational elements before moving to more advanced governance practices.
Implementation Phases
Phase 1: Foundations
  • Establish AI governance charter with board visibility
  • Identify and register AI use cases and model owners
  • Begin explainability, traceability, and override capture in pilot areas
  • Define control objectives across all AI lifecycle stages
Phase 2: Institutionalization
  • Extend governance practices across all critical AI deployments
  • Embed model and data controls into ITGC/ICFR/SOX frameworks
  • Introduce performance monitoring, feedback loops, and override reviews
  • Align audit, risk, and compliance functions with AI oversight responsibilities
Phase 3: Enterprise Integration
  • Link AI assurance to enterprise risk management and internal audit plans
  • Integrate role-based access, SoD, and retraining protocols
  • Deploy dashboards and reporting for AI decisions and controls
  • Ensure training across Finance, Risk, Data, and Technology stakeholders
Phase 4: Continuous Evolution
  • Align AI assurance posture with emerging regulations (EU AI Act, ISO/IEC 42001, etc.)
  • Conduct periodic maturity assessments
  • Use incident learnings and audit findings to refine framework
  • Prepare for real-time auditability and explainability at scale
This phased approach allows organizations to build capabilities incrementally, focusing on foundational elements before moving to more advanced governance practices. By following this roadmap, organizations can develop a comprehensive AI governance framework that evolves with their needs and regulatory requirements.
Each phase builds on the previous one, creating a progressive journey toward mature AI governance that supports both innovation and control.
Maturity Levels Matrix
The maturity model provides a framework for assessing current capabilities and planning future enhancements across key governance domains.
Organizations can use this matrix to assess their current maturity level across each capability domain and identify areas for improvement. By targeting specific capabilities for enhancement, organizations can develop a focused roadmap for advancing their AI governance maturity.
The matrix also provides a common language for discussing governance capabilities across different stakeholder groups, facilitating alignment and prioritization.
Framework References
NIST AI Risk Management Framework (AI RMF), 2023
Risk identification, mapping, measurement, and management for AI deployments
ISO/IEC 42001:2023
AI management system requirements, control objectives, and responsibilities
OECD AI Principles
Human-centric, transparent, accountable, and robust AI deployment guidelines
EU AI Act (Provisional Agreement)
Classification of AI systems by risk tier and associated governance obligations
UK Government Digital Principles
Ethical and accountable use of algorithmic systems in public and private services
ISACA AI Audit Toolkit, 2024
Risk domains, control activities, and assurance practices tailored for AI lifecycle
Glossary of Key Terms
Technical Terms
  • Explainability: Ability to describe how an AI model arrives at its output in terms understandable to humans.
  • Traceability: End-to-end ability to reconstruct the flow of data and decisions from input to outcome.
  • Lineage: Technical history of data, showing how it was sourced, transformed, and used.
  • Provenance: Metadata that certifies the origin, ownership, and validation status of data.
Governance Terms
  • Override: Human intervention to approve, reject, or adjust a model's decision.
  • Model Drift: Degradation in model performance due to changes in data or business context.
  • Human-in-the-loop (HITL): Inclusion of human judgment in AI decision processes.
  • Auditability: The ability to provide evidence of how decisions were made and governed.
Understanding these key terms is essential for effective communication and implementation of AI governance practices across the organization. This shared vocabulary enables stakeholders from different backgrounds to collaborate effectively on AI governance initiatives.
Explore Further Resources
We've covered the critical aspects of designing and implementing a robust AI Control Framework. This comprehensive guide provides a foundation for mitigating risks, ensuring compliance, and fostering responsible AI innovation within your organization.
To deepen your understanding and access the full suite of resources, including detailed framework documentation and practical tools, visit our dedicated platform.
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