The U.S. Department of the Treasury has released a report on the uses, opportunities, and risks associated with artificial intelligence (AI) in financial services. This report follows the department’s 2024 Request for Information (RFI), which gathered feedback from various stakeholders.
The document emphasizes the growing application of AI within the financial sector and notes its potential to expand opportunities while also presenting certain risks. These risks include concerns related to data privacy, bias, and reliance on third-party providers. The report is part of Treasury’s ongoing efforts to address AI-related cybersecurity issues in finance, building upon their March 2024 publication.
Under Secretary for Domestic Finance Nellie Liang commented on the initiative: “Through this AI RFI, Treasury continues to engage with stakeholders to deepen its understanding of current uses, opportunities, and associated risks of AI in the financial sector.” She added that “the Biden Administration believes that continued stakeholder engagement like this is important to fostering innovation in financial services while mitigating potential risks.”
The report suggests several next steps for consideration by Treasury, government agencies, and those involved in financial services. Key recommendations include:
– Promoting consistent standards for AI use through international and domestic collaboration among governments, regulators, and industry players.
– Conducting further analysis to identify regulatory gaps and address consumer harm risks posed by AI.
– Encouraging financial regulators to coordinate improvements in risk management frameworks and clarify supervisory expectations.
– Facilitating information sharing specific to financial services AI applications as well as developing data standards.
– Ensuring that financial firms review their AI use cases for legal compliance before deployment and periodically thereafter.
Treasury initiated the AI RFI on June 12, 2024. It received 103 responses from a diverse range of contributors including financial institutions, consumer advocacy groups, technology providers, fintech companies, trade associations, and consulting firms.
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