CHAPTER 56AI and the Law: Challenges and Risks for the Financial Services Sector
By Electra Japonas1
1Founder and CEO, The Law Boutique
AI is not perfect, but it’s here to stay. From Alexa’s skills to Spotify’s music recommendations, AI is silently improving our daily lives. The use of AI in the development of Google’s algorithm has increased the efficiency of searches with predictive technology. Uber’s use of AI allows us to retrieve accurate time estimates of when we can expect our driver or food deliveries. AI has even transformed Amazon’s supply chain through the integration of data from maintenance, manufacturing and inventory tracking. It is undoubtedly leading the next wave of the tech revolution, and financial services firms are in the forefront.
At the time of writing, there are more than 2000 AI startups in 70 countries that have raised more than $27 billion.1 The financial services industry is leading the way when it comes to both creation and adoption of AI – from managing assets to safeguarding against theft, managing investment, customer engagement, fraud detection, regulatory compliance and stock predictions. In financial services, decisions about individuals’ creditworthiness have traditionally been made using a transparent process with defined rules and relatively limited data sets. This transparency, however, may not always be achievable when AI drives big data.2
Most AI companies go to great lengths to create objective algorithms. However, even the most mindful ...
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