The Financial Stability Board has said the technology could lead to strikes, fraud and misinformation, as jurisdictions such as the EU consider the case for tougher regulation.
ADVERTISEMENTArtificial intelligence (AI) could pose a risk to the financial system, international standards bodies warned on Thursday, as they study an innovation that is attracting considerable interest among banks and other financial firms.
Jurisdictions such as the EU have taken the lead in regulating this potentially transformational technology – but are concerned about how to enforce the rules in an already highly regulated financial sector.
AI can “potentially amplify certain vulnerabilities in the financial sector and thus pose risks to financial stability”, despite its benefits in terms of operational efficiency, personalization and compliance, the Financial Stability Board said.
Multiple financial firms using the same AI models could lead market participants to consolidate, amplifying fluctuations in financial markets, the FSB said, and the outage of a single provider could have widespread implications.
Generative AI, which produces new text, images or videos based on user prompts, “could increase financial fraud and the ability of malicious actors to generate and spread disinformation in financial markets,” the report adds .
The document, which calls on global regulators to check whether legal frameworks are up to snuff, follows a June consultation paper from the European Commission, which cited the risk of bias or panic in financial markets – as well as the tendency of AI to produce inaccuracies or errors. downright nonsense.
The FSB is an international institution based in Basel whose members include regulators and central bankers from around the world, including the UK’s Financial Conduct Authority and the European Central Bank.
At a hearing last week to become the next EU financial services commissioner, former Portuguese finance minister Maria Luís Albuquerque told MEPs that technology had pros and cons.
“The risks to individuals are already taken into account in the AI law,” she said, adding that “there are many opportunities to use AI not only to detect fraud, but also to improve cooperation and the exchange of necessary information.