"If AI and machine learning-based decisions cause losses to financial intermediaries across the financial system, there may be a lack of clarity around responsibility," the report said.Replacing bank and insurance workers with machines risks creating a dependency on outside technology companies beyond the reach of regulators, the global Financial Stability Board (FSB) said on Wednesday.If a major AI provider went bust, it could lead to operational disruptions at a large number of financial firms at the same time, especially if used in "mission critical" applications, the report said. It has already introduced an AI chat box to answer common customer questions.Consultancy Accenture said in May that three-quarters of bankers surveyed believed that AI will become the primary way banks interact with customers within the next three years. While AI shows substantial promise if risks are properly managed, it could create too much dependency among banks and insurers on the few specialist businesses that provide AI technology.AI could, for example, lead to ‘non-sustainable’ increases in credit by automating credit scoring.
So-called ‘quant’ funds use AI to manage $1 trillion in assets.The report said that RegTech investment, or use of machines to comply with a welter of new regulations introduced to tackle money laundering and make banks safer, could reach $6. Fund managers are also using outside specialists to obtain machine-learning tools that sift through news and research for insight into market trends. The FSB, which coordinates financial regulation across the Group of 20 Economies (G20), said in its first report on artificial intelligence (AI) plastic bottle machine Manufacturers and machine learning that the risks they pose need monitoring. There are no international regulatory standards for AI and machine learning, but the FSB left open whether new rules are needed. Regulators could also find it difficult to identify who has made key financial decisions that go wrong. Expected rapid growth in AI also raises the prospect of outside technology players expanding their influence over the finance sector.45 billion by 2020.Nordea the Nordic region’s biggest bank, said last month that automation would help it to shed at least 4,000 staff.
