Over recent years, developing artificial intelligence (AI) and machine learning technology has seen gradual adoption within financial services, for example, in credit scoring, to automate assessments of creditworthiness. Other use cases such as robo-advice, have developed less quickly than expected. However, the emergence last year of generative AI capable of human-like text that can analyze vast amounts of data and create new content has caught the public's imagination and turbocharged interest in potential use cases together with concern over the inherent risks. For our part, Baker McKenzie in "The Next Decade in Fintech" has explored with experts in the field how AI in financial services is likely to evolve in the years to come.
In this edition of Bite-size Briefings, we take a bite-size look at the latest developments concerning AI regulation as it affects financial services in Australia, the EU, Hong Kong SAR, Singapore, Thailand, the UK and the US.
Currently, the EU is furthest along the road to developing specific AI legislation of general application and, given the size of its market, this may set the tone elsewhere, while other jurisdictions and their regulators are busy publishing principles and guidance.
The mischief sought to be addressed is nonetheless the same including governance, lack of explainability, as well as the risk of bias and discrimination.