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AI Governance and Risk Management for Regulated Industries
AI Governance and Risk Management for Regulated Industries
AI risk in regulated industries, like financial services, healthcare and life sciences, business services, and technology, is ultimately an implementation and sustainment challenge. Most organizations understand the need to govern AI risk, but turning that intention into clear ownership, consistent controls, and defensible evidence is much harder.
For regulated organizations, the challenge is compounded by the speed at which AI is developing, evolving regulatory requirements, inconsistent approaches to AI governance, and AI capabilities spanning internal and third-party technologies. But regulated industries also have an advantage: they already operate established security, privacy, and risk management programs.
Rather than creating an entirely separate AI governance program, organizations can build on those existing structures to bring AI under control while maintaining compliance and audit readiness.
Why AI Risk in Regulated Industries is Harder than it Looks
Managing AI risk in regulated industries is complicated by several issues: a lack of standardization for AI risk and security, unclear accountability, the pace of change with AI, and a regulatory environment that continues to evolve.
Organizations may be evaluating multiple AI governance frameworks while also considering existing obligations under programs and standards such as HIPAA, PCI DSS, FedRAMP, SOC 2, NIST, and ISO. At the same time, responsibilities for AI can span security, privacy, legal, compliance, risk, procurement, and technology teams.
That creates a practical question: Who is actually responsible for the risk?
Successful governance requires organizations to define who can approve AI use cases, who evaluates the associated risks, who monitors AI systems, and who is accountable when something goes wrong.
For U.S.-based organizations, the changing regulatory landscape adds another layer of complexity. Organizations may need to prepare for requirements affecting their operations without having a single, consistent domestic regulatory standard to follow as states like California, Texas, Colorado, Utah, and Illinois set their own regulations.
The goal should not be predicting every future change and requirement. It should be developing a defensible AI risk management approach that can adapt as requirements evolve.
The Shadow AI Problem Most Governance Programs Miss
One of the most immediate challenges for AI security for regulated industries is visibility.
Shadow AI can emerge when employees use generative AI tools or enable AI capabilities outside approved processes. That can introduce data handling, privacy, security, and regulatory risks before an organization has had the opportunity to evaluate them.
A governance program focused only on approved AI deployments can therefore miss some of the organization's most important exposures.
Before organizations can effectively govern AI, they need visibility into what is actually being used, including both sanctioned and unsanctioned AI.
Connecting AI Governance to Programs You Already Have
Effective AI governance for regulated industries does not necessarily require building another standalone compliance program.
In many cases, doing so can create unnecessary duplication. AI risks often overlap with areas organizations already manage, including data governance, identity and access management, third-party risk, incident response, privacy, and security.
Connecting AI to those existing domains can create a more consistent and auditable approach.
For example, AI agents with access to sensitive systems still require appropriate identities, permissions, and access controls. AI vendors still need to go through third-party risk processes. Sensitive information used in prompts or models still falls within data protection requirements.
Model risk management concepts that have long been used in financial services are also becoming relevant beyond banking. Practices such as model validation, documentation, performance monitoring, and defined ownership can help organizations establish greater accountability around enterprise AI.
Third-party AI risk deserves particular attention. AI functionality is increasingly embedded in SaaS products and other vendor technologies, which means organizations may be exposed to AI risk even when they are not developing or operating the underlying models themselves.
Integrating these risks into existing programs can help organizations reduce fragmentation while creating a clearer view of AI risk across the enterprise.
What Defensible AI Security Controls Look Like in Practice
Technology is only one part of effective AI governance.
As organizations evaluate AI governance platforms for regulated industries and AI security tools for regulated industries' enterprises, the focus should remain on whether the resulting controls are defensible.
In practice, that means controls should be:
- Documented: Requirements and responsibilities are tied to a recognized security or risk framework.
- Validated: Organizations can provide evidence that expected controls have actually been implemented.
- Maintained: Controls and supporting evidence remain current as AI use and risks change.
Accountability matters just as much. Organizations should clearly define who approves new AI use cases, who is responsible for model behavior and monitoring, and who owns the response when an AI-related issue occurs.
Audit readiness should also be continuous rather than something assembled immediately before an audit. Maintaining evidence of approvals, assessments, control implementation, monitoring, and remediation can help organizations demonstrate how AI risk is being managed over time.
How HITRUST Supports AI Governance in Regulated Industries
For organizations managing AI risk in regulated industries, the goal is not to add another disconnected program. It is to bring AI into a structured risk and assurance approach that works alongside existing obligations.
The HITRUST AI Risk Management Assessment helps organizations evaluate AI governance structures, risk identification, and the implementation of controls. The HITRUST AI Security Assessment addresses AI-specific security controls.
Together, they can help organizations approach AI governance for regulated industries as an extension of established security and risk management practices rather than a separate compliance exercise.
This matters because AI governance needs to hold up beyond an internal policy document. Security leaders, auditors, customers, regulators, and procurement teams may all need evidence that risks have been identified, responsibilities are clear, and appropriate controls are operating as expected.
Managing AI responsibly does not have to mean creating more complexity. For regulated organizations, the stronger approach is often to build on the security, compliance, and risk management foundation already in place, then extend it to address what is different about AI.
Ready to build greater trust into your approach to AI? Download the Building Trust in the Age of AI ebook.
AI Governance and Risk Management for Regulated Industries AI Governance and Risk Management for Regulated Industries
Addressing the AI Security Chasm
Addressing the AI Security Chasm
How to secure AI starts with knowing where it is being used, understanding the risks it creates, applying the right controls, keeping those controls current, and validating that they work. As AI adoption accelerates, doing all five is becoming increasingly important.
AI is already embedded in business applications, internal workflows, third-party products, and autonomous systems. But adoption is moving faster than many security programs can inventory new AI capabilities, evaluate their risk, or establish the controls needed to protect them.
The result is an AI security chasm: a growing gap between using AI, securing it effectively, and being able to demonstrate that it is secure.
Closing that gap requires more than AI governance or a list of best practices. Organizations need visibility into where AI is being used, a clear understanding of the risks it creates, controls designed to address those risks, and credible evidence that those controls are working.
The Growing Gap between AI Adoption and Security
AI introduces a visibility challenge before it becomes a control challenge.
Organizations may develop their own AI systems, enable AI functionality within existing technology, allow employees to use generative AI tools, or rely on vendors that incorporate AI into their products. Each creates another place where organizational data, systems, and processes may interact with AI.
Then there is shadow AI, or AI tools and features being used without the security team's approval or knowledge. When security teams cannot see where AI is operating, they cannot consistently evaluate the data it can access, the actions it can perform, or the risks it introduces.
As HITRUST has previously noted, “AI adoption will continue to accelerate. The question is whether assurance can evolve at the same pace.”
But visibility is only part of the challenge.
Governance can establish policies, responsibilities, and acceptable use. It does not, on its own, demonstrate that the controls protecting an AI system are operating effectively. In other words, organizations need to address both sides of the chasm: controlling AI risk and proving those controls work.
Moving from AI Visibility to AI Security
The first step in securing AI is understanding what needs to be secured.
Organizations should maintain visibility into internally developed models, generative AI tools used by employees, AI agents, AI features introduced into existing software, and third-party AI that interacts with organizational data.
Once those systems are identified, security teams can evaluate the AI security risk associated with each one.
That means looking beyond the underlying technology. Organizations should consider model and third-party dependencies, data exposure, access controls and permissions, integrations with business-critical systems, and attacks designed specifically to target AI.
HITRUST's 2026 threat findings have highlighted risks including user execution, AI-enabled phishing and deepfakes, and “Exfiltration via AI Agent Tool Invocation.”
Agentic AI makes this especially important. If an agent can interact with internal systems, security teams need to understand what it can access, which actions it is permitted to take, and whether manipulated inputs could cause unintended behavior or expose sensitive information.
Not every AI use case carries the same level of risk. Organizations need to assess AI systems based on factors such as data sensitivity, system access, autonomy, and business impact, so that higher-risk systems receive greater scrutiny.
For organizations that need a defined approach for evaluating AI governance and risk management practices, the HITRUST AI Risk Management Assessment provides a way to assess those practices.
Turning AI Security Best Practices into Testable Controls
Understanding risk is important. But understanding a risk does not reduce it on its own.
Organizations need AI security controls that translate identified risks into specific safeguards. That is an important distinction when considering AI security best practices. A best practice can describe what an organization should aim to achieve. A prescriptive control defines what needs to be in place in a way that allows its implementation and effectiveness to be tested.
Depending on the AI system and its risks, those controls can address access and permissions, data protection, model and supply chain security, input and output filtering, monitoring, and human oversight.
LLM security best practices should address what information a model can access and how inputs and outputs are handled. Controls such as input and output filtering can help reduce the risk of malicious prompts, unsafe responses, or inappropriate disclosure of sensitive information.
Generative AI security best practices should also consider how prompts, uploaded data, and generated outputs are handled. Depending on the use case, organizations may require human review before AI-generated content reaches customers or influences important decisions.
Agentic AI security best practices need to account for the ability of agents to take action. Strong permission controls, human-in-the-loop oversight, segmentation of AI components, and input and output filtering can help limit what an agent can access and do.
An AI security framework can provide a structure for putting these protections in place. But not every framework serves the same purpose. Most focus primarily on governance or risk management, while few provide prescriptive controls that can be tested and certified.
The question is not simply whether an organization follows an AI security framework. It is whether the approach provides the controls and evidence necessary for the risks the organization faces.
AI Security Has to Evolve with the Threat
Even well-designed controls cannot remain static while AI and the threat environment continue to rapidly evolve and change.
A control can continue operating exactly as designed while becoming less effective against new or evolving threats. As HITRUST has previously stated, “A control can still be operating exactly as designed and still no longer be sufficient for the risk it was intended to address.”
This is why assessing AI system security is not a one-time exercise.
Security requirements need to evolve alongside the threat landscape. Through its Cyber Threat Adaptive approach, HITRUST uses threat intelligence to evaluate whether its requirements continue to address the techniques being used by threat actors. According to HITRUST's Q2 2026 analysis, threat coverage was over 97% for the AI Security assessment.
Organizations should not only ask whether controls continue to operate. They should also ask whether those controls remain appropriate in response to an evolving technology and threat landscape.
Independent Validation Closes the AI Security Chasm
Putting controls in place is essential, but it does not completely close the AI security chasm.
An organization can say it follows AI security best practices. It can establish policies, implement controls, and conduct its own testing. But that is different from having those controls tested by someone other than the organization that implemented them.
Independent validation provides evidence beyond an organization's own assertions.
The HITRUST AI Security Certification brings together prescriptive, AI-specific controls, independent validation, and centralized quality assurance, scoring, and certification. It can be completed as a standalone assessment or added to an e1, i1, or r2 assessment.
That distinction matters for organizations trying to secure AI systems while also demonstrating security to customers, boards, regulators, and other stakeholders.
As the HITRUST Trust Report states, “With a 99.62% breach-free rate among HITRUST-certified environments, HITRUST stands alone in cybersecurity assurance.”
Closing the AI security chasm ultimately requires organizations to move beyond, saying the right controls are in place. They need credible evidence that those controls have been tested and are operating effectively.
The AI Security Chasm Extends to Third Parties
Organizations also need to consider the security of the AI systems they are buying.
Third-party applications and services increasingly incorporate AI capabilities, which means an organization's AI exposure can extend beyond the systems it develops or operates directly.
The same questions apply. Where is AI being used? What data or systems can it access? What risks does it introduce? What controls are in place? And what evidence demonstrates those controls are working?
Nearly half of breaches now reach the enterprise through the vendor and supplier ecosystem: the 2026 Verizon Data Breach Investigations Report found that 48% of breaches involved a third party, a 60% year-over-year increase. Source: Verizon 2026 DBIR.
As AI becomes more prevalent across third-party products, relying solely on vendor questionnaires or self-attestation may leave organizations without the evidence they need to make informed risk decisions.
Independently assessed evidence can provide greater confidence that a vendor's AI security controls have been implemented and validated.
Closing the AI Security Chasm
AI adoption is not slowing down, and organizations cannot afford to wait for the technology to stabilize before addressing the risks it creates.
Understanding how to secure AI systems requires visibility into the AI use across an organization, a clear understanding of the risks those systems introduce, prescriptive controls that address those risks, and a way to keep those controls aligned with an evolving threat landscape.
But control alone is not enough.
Closing the AI security chasm also requires credible evidence that those controls are operating as intended. Independent validation helps organizations move beyond simply stating that their AI is secure toward demonstrating that the controls protecting it have been tested.
Ready to strengthen your organization's approach to AI security? Get started with HITRUST.
Addressing the AI Security Chasm Addressing the AI Security Chasm
In Case You Missed it: The TPRM Top 10
In Case You Missed it
If you were too busy dealing with PHP2Shell to keep up with our TPRM Top 10 series, we get it.
Cybersecurity teams have had plenty competing for their attention lately. But while the threat landscape keeps moving, the challenges facing third-party risk management aren't slowing down either.
Throughout our TPRM Top 10 series, we've taken a closer look at some of the biggest challenges putting pressure on today's TPRM programs, from growing vendor ecosystems and limited resources to gaps in assurance, visibility, and risk data.
And if you missed a few along the way, we've got you covered.
The Challenges Facing TPRM aren't Getting any Simple
Third-party ecosystems continue to grow in size and complexity. At the same time, organizations are being asked to better understand who they're doing business with, where risk exists across those relationships, and whether the information they're relying on gives them enough confidence to make informed decisions.
That's a lot to manage.
Throughout the TPRM Top 10 series, we explored where common approaches to third-party risk can fall short and the challenges organizations should be thinking about as they evaluate and strengthen their programs.
But instead of making you hunt down every blog in the series, we've brought it all together in one place.
Ready to Strengthen Your TPRM Program?
Third-party risk isn't standing still, and neither are the challenges that come with managing it.
If you missed the series, or simply want all the insights in one place, we've made catching up easy.
Start with the TPRM Top 10, then talk with HITRUST about how we can help tackle the challenges facing your program.
Download the TPRM Top 10 paper to explore the full series. | Connect With HITRUST