AI governance in financial services

There are real and legitimate concerns around economic stability as well as ethical questions surrounding the ability of AI to mimic human intelligence, but also more immediate concerns over firms exploiting consumer data and the privacy concerns associated with using AI for the purposes of hyper-targeting. Following its recent survey on the use of machine learning and AI in financial services, the FCA and Bank of England found that the biggest risk for consumers is data bias and data representativeness, while the biggest risk for firms was a lack of AI explainability. In line with the FCA and Bank of England's AI Discussion Paper, there is a key question for financial services surrounding whether AI can be managed through fine-tuning the existing regulatory framework, or whether a new approach is needed. The speech suggests that the Senior Managers' and Certification Regime (SMCR) can be applied to many of the new regulatory challenges posed by the use of AI in UK financial markets. Data is of particular importance to AI, and data quality assessments to determine relevance, representation and suitability are heightened in the context of AI.