As AI in the banking industry continues to grow, financial institutions must be confident in the accuracy and security of the technology, according to the Bank of England’s Dec. 5 Financial Stability Report. 

“There’s a whole Pandora’s box of risks that we all have to adhere to,” Jonathan Hall, head of digital, commercial and institutions at NatWest Group, said during a Fintech Futures webinar Dec. 7.

The Bank of England’s Financial Policy Committee (FPC) is aware and watching the adoption and advancement of AI and machine learning within the financial services industry, further pushing financial institutions to prioritize their AI risk-monitoring practices, the report stated. 

Banks are no strangers to regulatory requirements, and as banks implement AI, data must be robust and controls must be “excellent,” Hall added. 

The FPC “alongside other relevant authorities, would seek to ensure that the [United Kingdom] financial system is resilient to risks that may arise from widespread adoption of AI and ML,” the report stated. 

AI regulation

AI regulation is being considered around the world as its use continues to grow. 

In October, U.S. President Joe Biden issued an executive order on safe, secure and trustworthy AI. 

It states: “The federal government will enforce existing consumer protection laws and principles and enact appropriate safeguards against fraud, unintended bias, discrimination, infringements on privacy and other harms from AI.” 

The order states that these issues are “especially important” within fields like health care and financial services. 

Additionally, negotiations regarding the European Union’s EU AI Act continued today as the EU works out how to govern the use of AI.  

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