CFTE continues its series of deep dives into AI in Finance, looking at how financial services must consider new age solutions, ethical dilemmas, market structure and talent as a result of these changes.
Regulatory and ethical dilemmas are not new, but the emergence of artificial intelligence in finance has sprung a whole new set of them for regulators to consider. With governments moving to adopt new rules to “protect and empower citizens”, public policy is undeniably affected by the rise of AI in finance.
According to a 2018 Deloitte report titled “The new physics of financial services | How artificial intelligence is transforming the financial ecosystem”, some of the concerns surrounding AI are beyond the regular scope of financial regulators, with it possibly affecting financial safety, global and regional economic growth, consumer protection and public interest, employment and human capital, and experience of other industries. Although it is widely accepted that AI can and will do good, in its current state it poses potential risks to the well-being of economies and societies.
For example, data is key in this transformation but regulations over data remain in development in many markets. similarly, public policy regarding data can affect entire economies as well as across sectors. Fintech startups also thrive by using AI and data to push for open banking and offer unique services to users. With consumers also beginning to gain more control over how their data is used, a simple method to manage and authorise is also needed.
However, things to consider include how to set global standard open banking and data privacy rules and how it affects existing financial institutions, rules for international and cross-border data flows, and solutions to consumer concerns about unethical data use and sharing.
This ties in with the views of Matt Davey (SocGen Security Services) in the CFTE AI in Finance course, saying that “AI will change every business” as well as having a “huge impact” on businesses in every sector.
For all the hype and excitement surrounding how AI in finance can transform the world, it is also prudent to take a step back to understand the potential impact, both positive and negative, it can have on other sectors as well. This is the key challenge facing public policy today, and it may be awhile before regulators around the world can put together a comprehensive policy that covers all angles with regards to AI in finance and other industries as well.
About the AI in Finance programme
The CFTE AI in Finance course has been developed in partnership with Ngee Ann Polytechnic, a leading institute of higher learning in Singapore and features high-quality content taught by five senior lecturers and 18 industry experts.
With an easy to follow format, the course is perfect for busy professionals to understand the technologies behind AI and machine learning that are disrupting finance.
These series of articles is based on the Deloitte report titled “The new physics of financial services | How artificial intelligence is transforming the financial ecosystem” released in 2018. Click here to download the full report.
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We are a platform supported by senior leaders from the largest institutions, startups and universities. We address the needs of professionals in finance to upskill in a rapidly changing industry being transformed by emerging technologies. More than 50,000 participants learn from our online courses, such as AI in Finance, Fintech Foundation or Extrapreneurship, a mini-MBA with fast growing startups such as Revolut or Shift Technology.
Cover image from sloanreview.mit.edu
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