Banks are a model for how other industries can explore using artificial intelligence safely and soundly, but policymakers can still take several steps to help foster innovation in the technology, the American Bankers Association said in a statement to the House Financial Services Committee, which held a hearing today on the use of AI in the financial and housing sectors.
In its statement, ABA said that banks use AI for a variety of reasons, including cybersecurity, fraud prevention, chatbots and lending. The association noted that banks already take many steps to mitigate the risks of using the technology. Those mitigation strategies include identifying vulnerabilities in their systems, bias training for employees who work with AI to make lending decisions, and third-party risk management, as most banks rely on vendors to provide AI services.
“Rather than bank use of AI, the most pressing danger for policymakers is how entities without such supervision, such as Big Tech developers, will safeguard consumers and preserve financial stability,” ABA said.
ABA had multiple recommendations for lawmakers as they explore AI policy. The association suggested policymakers avoid a patchwork of state data privacy laws given the potential consequences for consumers and national security. It recommended that any new AI legislation acknowledge the statutory and regulatory frameworks already in place for the financial services sector. ABA said it supported stricter penalties for AI-enabled financial crimes as well as research to help detect cyberthreats and fraud. It also recommended focusing on the risk of third-party platforms, adopting legislation with consistent and flexible industry standards, and more collaboration between policymakers and the industry to develop standardized strategies for managing AI-related risk.
