This work develops a multilevel governance theory for agentic AI and test its mechanisms in three studies over nine model versions, from a three-billion-parameter local model to a commercial frontier system.
Abstract
Financial institutions are delegating consequential decisions to agentic AI systems that decompose goals, coordinate models and tools, and act with little oversight. Yet agentic AI governance in FinTech is under-investigated. We argue the binding governance constraint is not capability but verifiability. We define the Verifiability Gap as the shortfall between the verification delegated authority demands and the explainability and reproducibility retained after a decision. It is indexed to a verifier, evidentiary standard, and audit lag. We develop a multilevel governance theory for agentic AI and test its mechanisms in three studies over nine model versions, from a three-billion-parameter local model to a commercial frontier system. Study 1 shows that provider releases alter historical financial actions, and that the controls replay needs belong to the provider: the frontier model rejects temperature, top_p and top_k outright and exposes no random seed. Under the tightest controls each endpoint allows, a local model reproduced 320 of 320 executions, hosted models 319 of 320 and 959 of 960. Study 2 shows that orchestration is a latent policy layer. Architecture changes final actions, and no execution record repeated in any configuration at any scale. The frontier model reproduces its own actions more often than the local ones, its record no better, and loses a comparable share of its differentiation. Capability buys a higher starting point, not auditability. Study 3 shows two deterministic credit-model versions each reproduce their current action perfectly, yet the current cannot recover a historical one. We conceptualize reproducibility as a governance profile, not a scalar, yielding evidence-contingent delegation: authority is defensible only while retained evidence substantiates its exercise. Beyond finance, the framework extends to other high-stakes domains requiring auditability.
This work proposes a four-layer framework (Policy, Engineering, Composition, Systemic) grounded in two distinct kinds of evidence, kept explicitly separate, and provides a 90-day implementation sequence spanning trading and payments/customer-facing systems.
It is argued that targeted amendments to the PA Master Directions recognising Agentic AI are necessary to keep up with the industry, and a dedicated working group on Agentic AI in financial services under the newly formed AI Governance and Economic Group (AIGEG).
Existing agent benchmarks ask whether the agent finished the task. We ask whether it finished it within policy. We introduce Fiducia-bench, a benchmark for the governability of financial agents---whether they escalate when obligated, abstain when required, and leave an auditable trail---and use it to study a question n...
Bounded sovereignty is introduced: partial technical and contractual access across the data, model, infrastructure, and interaction layers of the AI stack and it is argued that these access conditions determine which control protocols can be executed in practice.
The TrustX Agent Risk Classification Framework is introduced, a structured, repeatable instrument that can be applied to seven types of agentic AI systems and is grounded in foundational pre-existing AI governance frameworks.
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As decentralized finance (DeFi) ecosystems continue to expand, yield aggregators play an important role in automating capital allocation across lending and liquidity protocols. However, most existing aggregators still rely on static strategies and governance-driven update cycles, limiting their ability to respond to ra...
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