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EU: Commission requests comments on AI in financial sector

On June 18, 2024, the European Commission Directorate-General for Financial Stability, Financial Services, and Capital Markets Union requested public comments on artificial intelligence (AI) in the financial sector.

In particular, the consultation highlights that the EU AI Act aims to complement already existing financial service regulations and that the consultation intends to inform the Commission on the impact of AI in financial services, rather than create duplicative requirements.

Firstly, the consultation considers the AI applications in financial services, including particular use cases such as fraud detection, risk management, automation of routine tasks, personalized financial advice, enhanced decision-making, and improved customer services. The consultation further seeks clarification on the challenges and risks of the use of AI applications such as regulatory compliance with financial regulations, bias and discrimination, transparency and explainability, and dependability. More specifically, the consultation seeks clarification on general-purpose AI (GPAI) in financial services, pursuant to the definition given under Article 3(63) of the AI Act.

In addition, the consultation considers specific use cases of AI in financial services. This includes the use of AI in banking and payments and the use of AI for AI credit risk assessment and credit scoring, compliance, anti-money laundering, and customer service. Similarly, the consultation seeks information on the use of AI in securities markets for risk assessments and possible uses of AI in insurance and pensions.

Finally, the consultation seeks further information on AI and financial services in the specific context of the AI Act. Notably, the consultation highlights that the AI Act establishes two high-risk use cases for the financial sector, namely where AI systems are intended to be used to evaluate the creditworthiness of natural persons or establish their credit score and where AI systems are intended to be used for risk assessment and pricing for natural persons in the case of life and health insurance. Accordingly, the consultation requests feedback on the need for appropriate guidance to implement the above provisions.

Public comments may be submitted here until September 15, 2024.

You can read the press release here and the consultation here.