As the artificial intelligence craze persists,global regulators have expressed concerns about the implications of AI for the financial sector. In an official publication, the US Financial Services Committee (FSC) formed a task force to examine the impact of AI on the financial sector.
The primary objective of creating the new working group is to assess the impact of AI development on the financial services and housing sector. With AI’s ongoing development, most industries are exploring ways to tap these advanced technologies to gain a competitive advantage.
Risks and Benefits of AI
Consequently, investors and businesses plan to leverage the power of AI to boost productivity and efficiency in the workplace. The numerous opportunities offered by AI have obliged global regulators to step up and assess the impact of this technology on the financial sector.
On January 11, the FSC chair, Patrick McHenry, in collaboration with Maxine Waters, created a working group for AI. The two representatives tasked the new working group with roles to assess the impact of AI on the financial sector.
According to the report, representative French Hill and his colleague Stephen Lynch will lead the new AI working group. Other members will include Young Kim, Zack Nunn, Eric Houchin, Brittany Pettersen, Sylvia Garcia, and Ayanna Pressley.
The report demonstrated that the newly appointed AI task force assessed how AI affected the entire financial sector, including product development, compliance, legal obligations, and customer protection.
With the diverse nature of the financial sector, the new working group will review the existing regulations on AI to gain insight on the benefits and the risks associated with this technology. After reviewing the current rules on AI, the FSC requires the newly appointed task force to formulate new rules on AI.
FSC Appoints News Task Force for AI
According to the report, the proposed regulation on AI must outline the risks and benefits of this technology. Earlier last year, the US House of Representatives campaigned for the responsible use of AI technology. This forced the Democrats to form a new task force for AI development in late August 2023.
At that time, the Democrats anticipated that the new task force would support the Biden administration in formulating new rules to address the risk of adopting artificial intelligence.
The report indicates that AI development might replace humans in the workplace. This implies that with the adoption of AI, the global unemployment rates might increase. Despite the opportunities offered by AI technologies, the Democrats underscore the need to regulate artificial intelligence. The democrats believed AI was the largest technological threat after the atomic bomb.
In an earlier interview with a CNBC representative, Derek Kilmer confirmed that the newly appointed working group will clamp down on generated content spreading fake news. He noted that AI deepfakes have been a common ground for spreading inaccurate information.
Strategies to Address AI Risks
Kilmer confessed that several lawmakers and top-level managers have urged the government to address the risks associated with AI technology. After an intense discussion with US Vice President Kamala Harris, the key industry leaders urged the Biden administration to work in unison to mitigate the AI risks.
In October, President Joe Biden issued an executive order for the responsible use of AI technology. In retaliation to the president’s executive order, the newly appointed working group agreed to review the new provision on AI.
