The use of artificial intelligence (AI) in finance is still in its infancy and should be subject to monitoring and possible regulation to prevent potential harm to consumers and ensure markets function properly, the European Central Bank (ECB) has said.
KEY FACTS
The ECB sees a number of opportunities from the use of generative artificial intelligence by banks and other financial institutions – better information processing, more efficient customer service and even the ability to detect cyber threats.Despite the benefits of integrating AI into financial institutions, the ECB also sees risks, including herd behavior, over-reliance on a limited number of providers, more sophisticated cyber-attacks. The institution called for regulatory initiatives, which for now, however, are «in the initial stage».
IMPORTANT QUOTE
«This is why the implementation of artificial intelligence in the financial system must be closely monitored as the technology evolves. Regulatory initiatives may need to be taken if the shortcomings of the current framework become apparent,» the ECB said in an article published as part of its regular financial stability review.
ACCENT
64% of businesses believe that artificial intelligence will increase their productivity, while 40% of business owners are concerned about dependence on technology. Other estimates suggest that across industries worldwide, generative AI could add the equivalent of between $2.6 and $4.4 trillion in economic value annually. The banking sector is expected to be a big beneficiary.There is a broad consensus that the use of artificial intelligence has potential benefits for multiple sectors, including finance. More banks in the Eurozone are exploring and using innovative technologies such as artificial intelligence to support their digital transformation
KEY STORY
In mid-March, the European Parliament passed the world’s first artificial intelligence law, a move that followed many calls for a responsible approach to the development of the new technology and the risks it poses. Its main objective is to protect fundamental rights, democracy and the rule of law, while promoting innovation.
