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US Treasury seeks public input on the use of AI

Monday 10 June 2024 11:30 CET | News

The US Treasury has asked the public to share their input regarding the use of artificial intelligence (AI) in the financial services sector.

 

The agency is reportedly interested in better understanding the opportunities as well as the risks related to the development and the use of AI in finance. The decision comes as regulators have warned that the fast implementation of AI will lead to the emergence of new risks for the US financial system, especially if the technology lacks the proper oversight. 

Officials from the US Treasury have previously underlined that the use of AI in finance could lower transaction costs but that there are significant risks associated with it. Consequently, the Treasury has opened a 60-day window and invited stakeholders  to share their input.

The US Treasury Department has requested the public to share their input on the use of AI in the financial services sector.

 

The wider context

This is not the first time the US Treasury has taken a closer look at the use of AI in finance. For instance, in November 2022, the agency touched on this subject in its report discussing the impact of new entrant non-bank firms on competition in consumer finance markets. Some of the findings then included the role of AI in facilitating the capabilities and solutions extended by non-bank firms, and how AI could be leveraged to promote access to financial products and services. However, the same report also underlined the fact that the use of AI in finance leads to an unprecedented demand for consumer data, an aspect that introduces privacy and surveillance risks. The report also brought forward concerns related to bias and discrimination associated with the use of AI in the financial services industry.

In March 2024, the US Treasury published a report on AI and cybersecurity in the development of which it reportedly reached out to industry stakeholders to understand the AI-related cybersecurity risks in the sector.  

Moreover, in May 2024, the agency issued the 2024 National Strategy for Combatting Terrorist and Other Illicit Financing. The document emphasised the potential role of AI in strengthening anti-money laundering (AML) and Counter Terrorist Financing (CFT) compliance. 

In Europe, the European Union recently adopted the AI Act, a law aiming to harmonise the rules on artificial intelligence. The legislation follows a risk-based approach by imposing stricter rules for instances when the risk of AI causing harm to society is greater. The act also has implications for the financial sector – with, for instance, AI-based creditworthiness assessments by banks and pricing and risk assessments in life and health insurance being flagged as high-risk AI use cases and, thus, having to comply with stricter requirements. 


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Keywords: artificial intelligence, financial services, cybersecurity, AML, CFT, compliance, regulation, financial institutions, financial data
Categories: Payments & Commerce
Companies: US Treasury
Countries: United States
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