17 January 2023

The FCA and Bank of England joint Discussion Paper on AI

Written By FinTech Alliance

The FCA and Bank of England joint Discussion Paper on AI

The FCA and Bank of England published a joint Discussion Paper on Artificial Intelligence (AI) in October 2022. The DP can be found here. The date for response to the DP is 10 February 2023.


The use of artificial intelligence (AI) and machine learning (ML) in financial services may enable firms to offer better products and services to consumers, improve operational efficiency, increase revenue, and drive innovation. All of which may lead to better outcomes for consumers, firms, financial markets, and the wider economy.

As their recent survey indicates, AI adoption within financial services is likely to continue to increase due to increased availability of data, improvements in computational power, and wider availability of AI skills and resources. Similarly, the Bank of England (the Bank), the Prudential Regulation Authority (PRA), and the Financial Conduct Authority (FCA) (collectively ‘the supervisory authorities’) also endeavour to leverage AI and benefit from this technology to help meet our respective statutory objectives and other functions.

Although the use of AI may bring a range of benefits, it can also pose novel challenges for firms and regulators as well as amplify existing risks to consumers, the safety and soundness of firms, market integrity, and financial stability. One of the most significant questions is whether AI can be managed through clarifications of the existing regulatory framework, or whether a new approach is needed. How to regulate AI to ensure it delivers in the best interests of consumers, firms, and markets is the subject of a wide-ranging debate, both here in the UK and in other jurisdictions around the world.

This Discussion Paper (DP) sits within the context of this wider debate and focuses on the regulation of AI in UK financial services. The Bank, PRA, and the FCA seek to encourage a broad-based and structured discussion with stakeholders on the challenges associated with the use and regulation of AI. They are keen to explore how best to address these issues in a way that is aligned with our statutory objectives, provides clarity, is actionable, and makes a practical difference for consumers, firms, and markets.

Beginning with their current regulatory framework, they have considered how key existing sectoral legal requirements and guidance in UK financial services apply to AI. This evaluation will allow them to consider which ones are most relevant, explore whether they are sufficient, and identify gaps. The DP considers how such legal requirements and guidance apply to the use of AI in UK financial services to support consumer protection, competition, the safety and soundness of individual firms, market integrity, and financial stability. How can policy mitigate AI risks while facilitating beneficial innovation? Is there a role for technical and, indeed, for global standards? If so, what?

 

Send your response in here.

Up Next ...
28 March 2024

EToro adds 12 tokens to crypto lineup

EToro, the trading and investing platform, announced today that it ...

28 March 2024

Robinhood launches credit card

Robinhood continues to expand beyond its stock trading origins.In brief:- ...

28 March 2024

Sandbox Banking partner Plaid

Sandbox Banking and Plaid partner to strengthen identity verification and ...

27 March 2024

Targeting $180M in Revenue, Vault Aims to Lead the $50B Digital Crypto Banking Market

Written By: Vault

Vault's approach of providing personalized, effective, and affordable white label solutions for digital and crypto banking has captured the interest of a diverse range of...

More in Machine Learning

Posted By The Community

The State of Machine Learning in Finance, Banking and FinTech

23 July 2021

Consumers of digital services expect quality service, security, and convenience. Machine learning (M...

Written By: Code & Pepper

Posted By The Community

How machine learning is changing pricing optimization

25 May 2021

FinTech apps heavily rely on connecting with customers. They thrive by offering custom services to u...

Written By: Code & Pepper

Posted By The Community

AI vs. Financial Crime – Fight Against Money Laundering (AML) and Bad Actors

20 April 2021

Anti-money laundering (AML) AI is used to fight financial crime and secure apps’ reputation. After all, financial technology is all about trust. How is it done and what...

Written By: Code & Pepper

HSBC partners with Google on chatbot technology 

15 March 2021

HSBC is working with Google Cloud to build an AI ...

Articles Machine Learning

Machine learning in UK financial services

16 October 2019

In the financial services industry, the application of machine learning (ML) methods has the potenti...

Thought Leadership Machine Learning

Machine learning explainability in finance: an application to default risk analysis

12 August 2019

We propose a framework for addressing the ‘black box’ problem present in some Machine Le...

Thought Leadership Machine Learning

Voice assistants in Financial Services: If you want voice assistants to engage, teach them the art of conversation

01 March 2019

Developing a voice assistant for use within retail banking and what would enable it to succeed as a....

White Papers Machine Learning

Sustainable Financial Services in the Digital Age

30 April 2018

This paper looks at key digital changes in the industry and the effects of these. Specifically,...

There are no Events in this category