Regulating AI in the financial sector: recent developments and main challenges1

• December 16, 2024
• Andrew

Financial institutions have been using artificial intelligence (AI) for many years. Three AI use cases are worth highlighting: customer support chatbots; fraud detection, including for purposes of anti-money laundering and combating the financing of terrorism (AML/CFT); and credit and insurance underwriting. Use of AI for chatbots and fraud detection is not new, but the technology has significantly improved in recent years. In terms of credit and insurance underwriting, financial institutions are increasingly using AI for, among others, credit scoring, valuation of collateral and assessing unstructured information from multiple sources to more accurately predict insurance risks and set premiums.