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Working Toward Responsible AI: How Businesses Should Ensure that AI is Fair, Accountable, Safe and Governed

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Global Banking & Finance Review – by Alexei Zhukov

Working Toward Responsible AI: How Businesses Should Ensure that AI is Fair, Accountable, Safe and Governed

AI is increasingly engrained in everyday activities, from reading the news online and listening to music, to banking and driving to work. Its impact on our everyday lives is growing as algorithms minimize some or all decision-making. With worldwide business spending on AI set to reach $110 billion annually by 2024, it is undeniable that AI is an essential aspect of numerous industries. AI systems are now widely adopted as central to decisions regarding routing, purchasing, customer service and fraud detection across the banking, finance and insurance sectors. In fact, the financial services industry is regarded as the second biggest adopter behind retail.

With its ever-increasing impact on our lives, it is hardly surprising that governments and regulatory entities are becoming more concerned about AI’s widespread, evolving nature. In Europe, it is widely expected that the proposed EU AI Harmonisation legislation will be enacted in early 2024. The UK Financial Conduct Authority is also consulting on whether additional clarification of existing regulations may be helpful and how policy can best support safe and responsible AI adoption. In the United States, the Federal Trade Commission has emphasized that the agency already has enforcement powers with applicability to AI under three laws. The Algorithmic Accountability Act was also introduced in February 2022 in both Congress chambers.

Humanity has already borne witness to glimpses of what can go wrong with AI. In September 1983, the world averted a nuclear escalation thanks to Stanislav Petrov’s life-saving decision to wait for corroborating evidence, instead of triggering the chain of command, following an erroneous AI diagnostic that Russia was under attack. We have also seen how quickly a seemingly innocent chatbot like Twitter’s Tay can turn into a misogynist and racist conversationalist without the proper safeguard. Furthermore, with the increased intra-connectivity of AI services, realistic threat models must account for unpredictable systemic interference and sophisticated collusion that could take place and go completely undetected.

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