SEC.gov The Role of Big Data, Machine Learning, and AI in Assessing Risks: a Regulatory Perspective

Thank you, Alexander [Campbell] for the introduction. Thanks also to Genevieve Furtado and the other conference organizers for the invitation to speak here today, at the 19th Annual Operational Risk North America Conference. I understand that this is the Champagne Keynote address. Given that title, I feel obligated as an economist to share with you the reported last words of John Maynard Keynes – the father of modern macroeconomics: "I should have drunk more champagne." I hope my words here today do not inspire a similar sentiment. And finally, I must remind you that the views that I express today are my own and do not necessarily reflect the views of the Commission or its staff.[1] My remarks this afternoon will center on a technology topic that is encroaching on many aspects of our lives and increasingly so within financial markets: Artificial Intelligence. Perhaps better known by its two-letter acronym "AI," artificial intelligence has been the fodder of science fiction writing for decades. But the technology underlying AI research has recently found applications in the financial sector – in a movement that falls under the banner of "Fintech."