Consumer Duty will help keep AI in check, says FCA chief
The Financial Conduct Authority’s (FCA) CEO has said that new consumer protection rules will help keep technologies like artificial intelligence (AI) in check.
Speaking at the UK Finance annual dinner, Nikhil Rathi acknowledged that “AI can help solve” issues in finance, pointing to use cases from the insurance industry and banking.
However, the regulator boss noted that while the potential uses for AI were exciting, consumers might not be prepared for them.
“I heard from a chief technology officer of a major bank who said their firm had piloted an AI tool that could predict with 99% accuracy a customer’s bank balance in a year’s time,” Rathi said.
“When customers were presented with this innovation, they did not want the product integrated into their banking app.”
Rathi pointed to the FCA’s Consumer Duty, a shakeup to financial service regulation that’s currently under consultation, as a way to “move more quickly” to keep AI in check.
The FCA boss warned that tech firms have the potential to “wield huge power over the direction of our lives” with new advancements in AI and other technologies increasing the risk as much as they increase innovation.
Because of that, Rathi has once again called for the FCA’s regulatory authority to be protected and its framework to be expanded to manage “new developments, including AI, across sectors” as well as the “entry of Big Tech firms into the UK retail financial service” to ensure a “level playing field”.
“From masters of the universe to demi-gods of data, financial and Big Tech firms will wield huge power over the direction of our lives,” Rathi added.
Chancellor Jeremy Hunt said the government will bring forward legislation granting UK regulators the power to keep Big Tech firms in check to protect competition in his recent Autumn Statement.