Blog article
See all stories »

Regulating AI: Opening up the RegTech conversation

Regulating AI: Opening up the RegTech conversation with AI experts and regulators with Women In RegTech New York (WIRTNY) and Rise, by Barclays.

Setting the scene 

As the development and adoption of AI and Generative AI across industries including financial services has dominated headlines in recent months, so too have questions around the regulatory parameters that need to be considered as strategies for its safe acceleration and adoption, take shape. 

With the comprehensive AI law coming in the form of the EU AI Act, and the UK Government championing a pro-innovation approach to regulating emerging technologies, as well as the US Government's Executive Order on AI, for example, it is a topic that is front of mind for many businesses looking to take advantage of tools on offer – and do so well. 

What about the regulators? 

To understand business obligations, particularly in the financial services sphere, we must understand how regulators are using AI, as well as what they expect of regulated firms.  

This was discussed at the Women in RegTech New York panel, hosted by Rise, by Barclays in May as part of their 'Regulating AI' session, which saw experts come together to debate the opportunities, challenges, and road ahead for regulating AI. The panel comprised of figures from financial institutions, technology providers and regulators, with the likes of the New York State Department of Financial Services, Barclays, and the Financial Industry Regulatory Authority (FINRA) represented alongside seasoned Investors.  

Key takeaways from the Panel Discussion: 

  • Globally there have been more than 2203 regulatory alerts over the last 6 years related to AI (1,695 US; 508 non-US) from 458 Unique Agencies, as shared by RegAlytics.

  • RegTech has a role to play: As urgency around AI implementation and development accelerates, there is a crucial part for RegTech to play when it comes to helping both financial services and FinTech organizations meet evolving compliance obligations and, importantly, prove they are working with AI in a responsible way.  

  • Understanding exists: Ultimately, we must remember that banks and other regulated entities have already been using AI for a significant amount of time, and there are many aspects that are already understood and managed from a risk and regulatory perspective within those firms.   

  • … but caution does too: It is widely recognized, however, that Generative AI represents a new and different form, so banks are taking a more cautious approach, including relying on extensive piloting and testing before considering deployment. Including rigorous approaches to understanding the processes vendors and partners have taken in their development of solutions in this domain.

  • Data governance is critical: Speakers collectively voiced the importance of data governance as a prerequisite and fundamental to any initiatives involving Generative AI, including focus on appropriate risk identification and mitigation. 

  • Prioritize traceability: FinTech and RegTech start-ups, especially, are increasingly aware that regulation across AI is a key consideration for financial services firms when selecting an external technology partner. Documentation and traceability, then, must be prioritized in parallel to developing any targeted solution if vendors want to be successful in the selection process.  




Comments: (0)

Now hiring