Federal Financial Agencies Seek Comments on Use of Artificial Intelligence | Sheppard Mullin Richter & Hampton LLP

Synthetic intelligence will stay a spotlight in 2021, as we predicted in the beginning of the yr. From the FTC to the EU to others, regulators of all types ensure that firms use these instruments. No later than 5 US federal businesses are searching for data on how monetary establishments are utilizing AI instruments. Stakeholder feedback are due by June 1, 2021.

These monetary businesses acknowledge and acknowledge the advantages of AI and discover that AI instruments have the potential to enhance enterprise decision-making and enhance providers for customers and companies. They discover that these instruments are utilized by monetary providers firms to flag suspicious transactions and personalize customer support. Whereas there are actually advantages, the businesses acknowledge that utilizing AI instruments isn’t with out its dangers, together with operational vulnerabilities, cyber threats, heightened shopper safety points, and privateness considerations.

The businesses search business enter on numerous matters to get a fuller image of the present AI. That is a part of their efforts to find out the suitable ranges and varieties of governance, threat administration and management over these instruments. The enter areas you might be searching for embrace:

  • Explainability
  • Information high quality and knowledge processing
  • Overfitting (ie when an algorithm “learns” from idiosyncratic patterns within the coaching knowledge that aren’t consultant of the overall inhabitants)
  • On-line Security
  • Dynamic replace
  • Use of AI by neighborhood establishments
  • Use of AI developed or offered by a 3rd occasion
  • Honest lending

Whereas the businesses are signaling that they might produce extra steering, they level out that there are presently many rules governing using AI instruments. These embrace the Honest Credit score Reporting Act, Part 5 of the FTC Act, Sections 501 and 505 (b) of the Gramm-Leach-Bliley Act, and extra. Equally, a number of normal guides have been issued that may present recommendation on utilizing AI instruments.

Put it into apply. This request for remark provides monetary establishments the chance to make regulators conscious of the advantages and challenges of utilizing AI. Feedback are due by June 1, 2021. Directions on how one can submit feedback to every company could be discovered on the high of the request for feedback.

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