The Bank of England and the Financial Conduct Authority released their new final report on the Artificial Intelligence Public Private Forum in February 2022. The UK financial regulators emphasised the pros and cons of applying AI techniques. Mainly they focussed on the AI benefits and challenges in the financial sector.
Negligent and mercenary use of AI can affect operational and cyber risks for businesses. It can also lead to potential loss of intellectual property, financial loss, and ruined reputation. Same time the AI models used in UK financial services are becoming more sophisticated. So Bank of England and FCA should provide more clarity on nowadays policy by illustrating case studies, but same time shouldn`t be over-prescripted.
The UK Bank system was cleared of human judgments factor in loan decisions by a government review a long time ago but there are still ethnic minorities who are found to be lending less than others. And that is one of the points where the AI technologies datasets should be re-checked and to be collected with the greater fair.
The benefits mentioned above are concentrated in the further personalisation of financial products and services. That process includes a more seamless customer experience in different types of businesses. The applying AI technologies are speeding up all and whole business processes, providing automation of both external and internal office functions. It also helps in supporting more effective decision making. Other benefits of using AI include the ability to assess the scale and complexity of the financial system and combat fraud.
Still, the AIPPF report does not indicate any specific public policy to follow. However, the overall message suggests that a phased approach may be the preferred option for spurring innovation when it comes to regulating AI.