The Banking Risk of AI Explanation: The Five Beacons Model

JM García-Maceiras

Jan 2026 · Zyphrum Alchemists

About this ebook

Artificial Intelligence brings significant benefits to banking, but also introduces novel risks, such as the requirement that decisions made by complex machine learning systems and deep neural networks be adequately explained to humans. This work offers a multifaceted view of the topic, harmonizing the legal frameworks of Data Protection and Artificial Intelligence, the background of systems engineers, academic contributions from the computing community, and banking risk management under Basel III and the DORA Regulation, suggesting the idea of the Five Beacons as a structural model for explanation to strengthen the protection of financial customers (and every citizen, at large) against the machine. As stated in the book: "Rather than treating explainability as a single explanation delivered at the end of an automated process, this model establishes a sequence of prior explanations, each addressed to actors capable of understanding and validating increasingly complex aspects of the system’s behavior. This structure ensures that the explanation ultimately provided to the customer is supported by earlier layers of technical, organizational, and supervisory accountability.” While rooted in banking, the Five Beacons model is designed to be seamlessly integrated into any high-risk AI environment—including healthcare, justice, critical infrastructure, and human resources—ensuring full compliance where it matters most.

About the author

JM García-Maceiras (Julio-Marcos García Maceiras). Jurist, business executive, author. He was born in La Coruña (Spain), the first son of a sewing artist and a banking employee; he grew up around the Tower of Hercules and became a youth footballer at Real Club Deportivo.

He studied Law in Santiago de Compostela. He worked as a junior Civil and Criminal court judge. He took doctorate courses in Philosophy of Law. In Madrid, he held jobs as a leading company lawyer. In Brussels, he passed two open competitions for the European Commission's directive staff. 

Since 2008, he has steered AEPROSER, where he pledged to set the modern standard for the outsourcing of processes and services. Nowadays, he also serves as the Vice-chairman of an international think-tank in the field of Artificial Intelligence for the legal practice, and as the General Counsel at the Spanish pool of mortgage brokers.

A prolific author of several literary works—frequently published under pseudonyms—and an extensive body of essays on philosophy and law, most recently the landmark study “The Banking Risk of AI Explanation” (2026). A translator of English and French poetry and a regular critic of Madrid’s classical music scene, he also curates a specialized collection of historical manuscripts and financial antiquities (oldpaperstocks.blogspot.com). He holds the title of Yachtmaster Ocean.