The Rules for AI in Financial Services - Shield

1. What are the Rules for AI in Financial Services Financial services and market fraud; two phrases that you’d never expect to hear uttered in the context of a technology wild, wild West. Yet that’s the picture painted behind the recent RFI (Request for Information) posted by five of the world’s largest financial regulators. Implicit Bias in Machine Learning Let’s step back a moment for a quick primer into how implicit bias has apparently crept into financial risk assessment models. Let’s step back a moment for a quick primer into how implicit bias has apparently crept into financial risk assessment models. First, machine learning (ML) is an applied form of AI. The term originated to describe the practice of how the machine learns to associate X with Y after it has been exposed thousands or millions of times to data that explicitly “states” X = Y. A Call for Governance The wild, wild West analogy here refers to a lack of self-agency and policing which leads to an “anything goes” type of environment. Even in an industry as tightly regulated as financial services, there is no existing set of standards or rules governing how AI and ML can be used in the assessment of financial risk. What’s Next? Ultimately, the goal is a better understanding of and rules governing how AI and ML should be applied to alert compliance officers to suspected market abuse. Along with that permission to operate and utilize such technologies now comes the responsibility and accountability to report if such practices are implicitly biased against certain populations. Your AI can no longer remain a black box. https://www.shieldfc.com/