AI in Banking and Financial Services: Balancing the Benefits of AI With Legal and Regulatory Issues, Risks

Description

Banks and financial institutions are quickly adopting the use of AI to streamline and optimize internal processes and to meet evolving customer demands for smarter and more convenient ways to access, spend, save, and invest money. As a result, U.S. regulators and lawmakers have been paying increased attention to--and expressing concerns about--the use of AI in the financial services industry.

The benefits of AI to financial institutions and banks are numerous. Financial services providers are employing AI for several tasks including automating data entry and analysis processes, improving decision-making about factors such as credit risk, enhancing the customer experience by providing personalized recommendations and advice, and fraud detection.

Although banks and financial services institutions using AI may benefit from increased efficiency and reduced transaction times and costs, among other benefits, they must consider potential legal and regulatory risks associated with each new instance of AI use. Regulatory requirements arising under the Bank Secrecy Act, the Dodd-Frank Wall Street Reform, the Consumer Protection Act, and the Basel III framework mandate strict compliance requirements for banks and financial institutions, including risk management, capital adequacy, and consumer protection. Thus, it is imperative for counsel advising on key decisions to fully consider the legal and regulatory implications of each new AI use case.

Listen as our authoritative panel discusses the benefits of AI for banks and financial institutions and provides strategies for managing the risks associated with an AI adoption that evolves with the technology and the ever-changing regulatory landscape.