On 11 October 2022, the PRA and FCA jointly published Discussion Paper 22/4 ‘Artificial intelligence and machine learning’ (DP22/4).
The FCA, PRA and Bank of England have a close interest in the safe and responsible adoption of artificial intelligence (AI) in financial services. Although the use of AI may bring a range of benefits, it can also pose novel challenges for firms and regulators as well as amplify existing risks to consumers, the safety and soundness of firms, market integrity, and financial stability.
One of the most significant questions is whether AI can be managed through clarifications of the existing regulatory framework, or whether a new approach is needed. How to regulate AI to ensure it delivers in the best interests of consumers, firms, and markets is the subject of a wide-ranging debate.
Henceforth, the regulators want to share and gain insight on their thinking on:
- The potential benefits and risks related to the use of AI in financial services.
- How the current regulatory framework applies to AI.
- Whether additional clarification of existing regulation may be helpful.
- How policy can best support further safe and responsible AI adoption.
The deadline for comments on DP22/4 is 10 February 2023