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Banking on AI mandating a proactive approach to AI regulation in the financial sector.pdf (682.3 kB)

Banking on AI: mandating a proactive approach to AI regulation in the financial sector

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journal contribution
submitted on 2024-06-30, 10:12 and posted on 2024-06-30, 10:12 authored by Jon Truby, Rafael Brown, Andrew Dahdal

Despite an emerging international consensus on principles of AI governance, lawmakers have so far failed to translate those principles into regulations in the financial sector. Perhaps, in order to remain competitive in the global race for AI supremacy without being typecast as stifling innovation, typically cautious financial regulators are unusually allowing the introduction of experimental AI technology into the financial sector, with few controls on the unprecedented risks to consumers and financial stability. Once an unregulated AI software causes serious economic harm, a public and regulatory backlash would lead to over-regulation that could harm innovation of this potentially beneficial technology. Artificial intelligence is rapidly influencing the financial sector with innumerable potential benefits, such as enhancing financial services and improving regulatory compliance. This article argues that the best way to encourage a sustainable future in AI innovation in the financial sector is to support a proactive regulatory approach prior to any financial harm occurring. This proactive approach should implement rational regulations that embody jurisdiction-specific rules in line with carefully construed international principles.

Other Information

Published in: Law and Financial Markets Review
License: http://creativecommons.org/licenses/by/4.0/
See article on publisher's website: https://dx.doi.org/10.1080/17521440.2020.1760454

Funding

Qatar National Research Fund (NPRP11S-1119-170016), FinTech and RegTech: Building a resilient, inclusive and competitive legal and regulatory framework for 21st century finance in Qatar.

History

Language

  • English

Publisher

Routledge

Publication Year

  • 2020

License statement

This Item is licensed under the Creative Commons Attribution 4.0 International License.

Institution affiliated with

  • Qatar University
  • College of Law - QU
  • Center for Law and Development - LAWC