Context
The FCA has published a blog about the use of AI in UK financial markets. The blog, by Ed Towers (Head of Department, Advanced Analytics and Data Science Unit) and Henrike Mueller (Manager, AI Strategy), asks how the UK can build confidence in AI so consumers and markets benefit, and the UK can be a place where beneficial technological innovation can thrive to support growth.
Key points to note and next actions
- The blog considers the promise of AI to assist smarter decision-making, enable stronger protections, and create better experiences.
- Under the heading ‘clarity without closure’ the blog considers the regulatory challenge of balancing firms’ needs for regulatory clarity on AI (a predictable framework to guide their investments, operations, and risk management) with the risks of the FCA moving too quickly, the potential stifling of innovation and ‘too quick’ regulatory action becoming out-dated very quickly as the technology evolves at a pace.
- The FCA sets out why it sees ‘AI Live Testing’ as a collaborative path forward, and why firms should take part. It also sets out that FCA AI Live Testing is not designed to become a tool to approve or certify that an AI model is OK to use; it does not believe this is within the FCA’s remit. Also, it is not an enforcement or supervisory function – it’s entirely voluntary.
- The blog considers how we can move from model evaluation to AI system evaluation.