On 25 September 2024, the Bank of England (BoE) published a speech on TRUSTED AI: Ethical, safe, and effective application of artificial intelligence at the BoE, which was delivered by its Chief Data Officer, James Benford, at the Central Bank AI Conference.
In the speech, Mr Benford explains that recent advances in artificial intelligence (AI) bring many opportunities and challenges for central banks. He discusses how the BoE is preparing for the transformative potential that advances in AI offer to improve how it works internally to deliver monetary and financial stability, and also explains what the BoE is doing to address the challenges posed by AI.
Key points highlighted include:
- Central banks are not starting from scratch and should take confidence from their decades of experience with economic and financial models and, more recently, multidisciplinary AI solutions.
- This new chapter will quickly expand the breadth and depth of the BoE’s use of models. Prior agendas to modernise how it manages and works with data are “becoming more load bearing” and the BoE needs to accelerate and broaden them. Mr Benford flags that models will need to be TRUSTED – i.e. Targeted, Reliable, Understood, Secure, stress-Tested, Ethical and Durable – to ensure their ethical, safe and effective application across the organisation.
- The BoE must be alive to gaps being exposed in existing frameworks as the use of AI increases. Ongoing work is needed to embed ethical consideration, appropriate governance, and stress testing into the systems that are being built or used internally at the BoE.
Mr Benford also flags that, while not the subject of the speech, work is also ongoing within the BoE’s policy committees and internationally on how best to address the potential risks to safety and soundness and to financial stability from financial firms’ use of AI and so to enable its safe adoption. He notes that the BoE’s internal use of AI, and the strategy it is building to guide it, can both inform and be informed by this policy work.