The European Securities and Markets Authority (ESMA) has raised concerns about the use of artificial intelligence in the banking sector and financial institutions in the European Union. In its first statement on the subject, ESMA stressed the need for strict oversight and regulation to ensure consumer and investor protection.
The use of AI in financial services has the potential to improve investment strategies and client services. However, with this comes significant risks related to transparency, accountability, data security and privacy.
What could go wrong?
One of the key challenges is the lack of transparency and clarity of decisions made by AI systems. This creates difficulties for users in understanding the basis of the financial recommendations or decisions they receive. Lack of accountability can also lead to incorrect or biased decisions that harm consumers.
What would be the solution?
To address these challenges, ESMA proposes implementing specific regulations and standards to ensure that AI systems are used ethically and responsibly. This includes requirements for accountability, transparency and safety, as well as mechanisms to control and supervise developers and users of AI technologies.
What’s next?
In its statement, ESMA also draws attention to the use of AI technologies developed by third parties, such as ChatGPT and Google Bard. This includes instances where these technologies are used without the direct knowledge and approval of senior management of financial institutions.
ESMA also plans to introduce new tools to monitor and control the development and application of AI technologies in the banking sector. These aim to prevent potential abuses and ensure that all financial institutions comply with established standards and regulations. These measures are part of a broader EU strategy for digital transformation and enhancing security and trust in digital financial services.
Despite the promising opportunities that AI offers to improve financial services, it is essential to ensure adequate oversight and regulation. This will ensure that consumers are protected and financial institutions use AI technologies in an ethical and responsible manner. The new regulations will contribute to creating a safer and more transparent financial environment in the EU.
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