Financial Regulators' Proposed Policymaking Approach to AI/ML | techUK Response

techUK sets out its response to Financial Regulators' (FCA/PRA) proposed regulatory regime covering Automated Intelligence (AI) Machine Learnings (ML) application and development within the financial services sector

Responding to the Artificial Intelligence Public-Private Forum’s (AIPPF) final report, covering the sharing of information on key challenges, potential principles/guidelines, and future industry input within policymaking – The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) published a joint Discussion Paper (DP5/22) on AI/ML within financial services and potential regulatory implementations and considerations within the technology's usage within varying business processes. 

See the joint-regulator Discussion Paper here.

Through extensive consultation with members, techUK's response can summarised via; 

• Any future regulatory approach to AI and/or Machine Learning (ML) within the financial services sector must be pro-innovation, risk-based and outcomes-focused.
   
• Regulators should look to acknowledge and strengthen existing regulation where necessary. Any potential new regulation or governance mechanisms must not replicate or contradict existing regulation. When considering whether new regulation is needed, lawmakers should focus on whether the use of AI/ML adds new risks beyond those risks already present when AI/ML is not in use. Where existing laws are insufficient to address AI/ML risks or otherwise create uncertainty about the application of AI/ML, lawmakers should generally amend existing applicable requirements rather than creating a separate framework for AI/ML.
   
• Following the FCA’s Consultation Paper covering its plans to close the financial advice gap, AI can be used to provide low-cost tailored advice, helping to widen access to consumers.

Read the full response below.

Please send any thoughts/ideas regarding this response paper to the team below. 

Andy Thornley

Head of Financial Services, techUK

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Andy Thornley

Head of Financial Services, techUK

Andy joined techUK in August 2022 as Head of Programme – Financial Services. His role includes leading techUK’s work in building a greater understanding of the 'technological art of the possible' in order to apply it to the reform and evolution of financial systems.

Before joining techUK, Andy worked for a number of other bodies in the financial services sector, including the British Insurance Brokers’ Association, where in addition to owning policy and public affairs, he was also responsible for fostering InsurTech in the sector.

Andy has a degree in Human Biology and holds a Certificate in Insurance (Cert CII) qualification from the Chartered Insurance Institute. Outside of work, Andy is an avid cyclist and races competitively both on the road as well as the velodrome.

Email:

[email protected]

Twitter:

@AndrewThornley

LinkedIn:

https://www.linkedin.com/in/mr-andy-thornley/

Katherine Holden

Associate Director, Data Analytics, AI and Digital ID, techUK

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Katherine Holden

Associate Director, Data Analytics, AI and Digital ID, techUK

Katherine joined techUK in May 2018 and currently leads the Data Analytics, AI and Digital ID programme. 

Prior to techUK, Katherine worked as a Policy Advisor at the Government Digital Service (GDS) supporting the digital transformation of UK Government.

Whilst working at the Association of Medical Research Charities (AMRC) Katherine led AMRC’s policy work on patient data, consent and opt-out.    

Katherine has a BSc degree in Biology from the University of Nottingham.

Email:

[email protected]

Phone:

020 7331 2019