New report explores questions of responsible AI innovation in financial services

Monday 14 Jun 2021

A new report published today (Monday 14 June 2021): AI in Financial Services explores the use of artificial intelligence (AI) and the importance of responsible innovation in the financial services sector.

The report was commissioned by the Financial Conduct Authority (FCA) as part of The Alan Turing Institute’s public policy programme collaboration with the FCA and has been launched at the accompanying CogX session. The authors hope it will provide stakeholders in the sector with the understanding needed to navigate the evolving AI landscape in pursuit of responsible and socially beneficial innovation.

AI is already having a substantial impact on the delivery of financial services and its role will increase in the years to come. The adoption of AI in financial services is underpinned by three distinct elements of innovation: machine learning (ML), non-traditional data, and automation. Each of these elements can enable significant benefits but also pose challenges that give rise to potential harms.

The new report provides an introduction to AI, discusses general challenges and guiding principles for the responsible adoption of AI, and maps out potential benefits and harms associated with the use of AI in financial services. Crucially, it also examines the fundamental role of AI transparency in pursuing responsible innovation.  

The report is divided into four key sections:

  1. Introduction to AI. Explains central technological concepts and highlights the relationship between them.
  2. General challenges and guiding principles for responsible AI adoption. Provides the foundation for understanding how AI-related risks arise and the role of AI ethics principles in guiding responsible innovation.
  3. Potential benefits and harms in financial services. Considers the positive and negative impacts that different uses of AI in financial services could have in the areas of consumer protection, financial crime, competition, the stability of firms and markets, and cybersecurity.
  4. AI transparency and its importance for responsible innovation. Describes different forms of transparency, underlining the foundational role of AI transparency in ensuring and demonstrating that AI systems are trustworthy and used responsibly.

The authors of the report, Dr Florian Ostmann and Dr Cosmina Dorobantu, from The Alan Turing Institute’s public policy programme, said:

“The use of AI in financial services ushers in promises of beneficial technological innovations as well as threats of harmful impacts. We hope that this report will help advance the debate on responsible AI in financial services by providing a comprehensive conceptual framework for examining the challenges and risks that AI technologies pose and defining expectations about AI transparency in this sector.”

Notes to editors:

  • This report was written by Florian Ostmann, Policy Theme Lead and Policy Fellow within The Alan Turing Institute’s public policy programme and Cosmina Dorobantu, Deputy Director of the public policy programme and Policy Fellow at The Alan Turing Institute and Research Associate at the Oxford Internet Institute.
  • Find out more about the work of the Institute’s public policy programme.
  • Any press enquiries please contact [email protected].