The Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA), and the Bank of England (BoE), collectively known as ‘the regulators’, have published feedback on the discussion paper (DP5/22) concerning the use of Artificial Intelligence (AI) and machine learning in the financial services sector. The joint paper was initially released in October 2022.
DP5/22 explores how AI might affect both prudential and conduct supervision of financial services firms and is predicated, in large part, on responses gathered from industry participants. The feedback statement released this month summarises those collected perspectives.
The regulators’ publication forms part of broader, ongoing exploration, and discussions on the application of automated technologies in financial services. These topics raise a number of legal and ethical considerations, particularly surrounding liability, risk management, transparency, and data privacy.
Keep watching this space for more insights and the ensuing actions that regulatory bodies like PRA, FCA, and BoE may take, informed by the revelations in their recently shared feedback statement.