Treasury Report Highlights Opportunities and Risks of AI in Financial Services
The U.S. Department of the Treasury (Treasury) has released a report following the issuance of its 2024 Request for Information (RFI) on the Uses, Opportunities, and Risks of Artificial Intelligence (AI) in Financial Services. The report highlights the increasing use of AI in the financial sector and emphasizes the potential for AI to bring about opportunities while also amplifying certain risks such as data privacy, bias, and third-party providers.
Under Secretary for Domestic Finance Nellie Liang stated, “The Biden Administration believes that continued stakeholder engagement is important to fostering innovation in financial services while mitigating potential risks.” The report outlines potential next steps to be considered by Treasury, government agencies, and the financial services sector, including international collaboration to promote consistent standards for AI use, further analysis to address gaps in regulatory frameworks, and enhanced information sharing on AI in financial services.
The AI RFI, published in June 2024, received 103 comment letters from various stakeholders, including financial firms, consumer advocacy groups, technology providers, and trade associations. The report recommends that financial firms prioritize reviewing AI use cases for compliance with existing laws and regulations before deployment and periodically reevaluate compliance as needed.
Overall, the report underscores the importance of understanding and managing the risks associated with AI in the financial sector while also harnessing its potential for innovation. Stay tuned for further developments in AI regulation and implementation in financial services.
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