Fintech Today
  • About
  • Banking
  • Insurance
  • Resources
    • COVID-19
Subscribe
No Result
View All Result
  • Digital Transformation
  • Customer Experience
  • Cybersecurity & Risk
  • Regulation & Compliance
  • Claims Management
Fintech Today
  • Digital Transformation
  • Customer Experience
  • Cybersecurity & Risk
  • Regulation & Compliance
  • Claims Management
No Result
View All Result
Fintech Today
No Result
View All Result
Home Contributed Articles

AI: Helping or Hurting Companies in Staying Compliant

by Sandy Fliderman
March 9, 2023
in Contributed Articles
Reading Time: 7 mins read
A A
Share on FacebookShare on Twitter

The technological life cycle follows a familiar pattern. It starts with a thrilling beginning — an exhilarating birth — followed by meteoric maturation, refinement through regulation, and a dignified decline. 

Presently, there is an implicit awareness of AI technology from consumers across business sectors. References to social media “algorithms” and quotes from movies such as “The Matrix” and “The Terminator” continuously permeate into the mainstream. Business leaders that have harnessed the rays of innovation are poised to capture the consciousness of consumers and deftly address their needs. 

However, there are disquieting factors that financial tech, or fintech, business leaders must analyze ahead of this technological revolution. These factors include algorithmic bias, data privacy concerns, a regulatory vacuum ripe for exploitation, and the human complications arising from dependency on AI tooling.  

Nevertheless, as we peer through the present window, the sun is setting on traditional tech. But if we look to the east, AI is on the horizon. 

Regulations Help Protect Businesses and their Consumers 

The fintech industry has made significant strides in digital payments and money transfers. Yet, with these rapid technological advancements, societal impacts need to be addressed and regulations need to be redefined to protect citizens.  

The White House, for instance, has outlined a “Blueprint for an AI Bill of Rights” to guide automated systems design, use, and deployment. One of these technological innovations includes the adoption of blockchain, a decentralized and distributed digital ledger that records transactions securely and transparently.  

Additionally, cryptocurrencies and their respective tokens have become mainstream over the past several years, meaning the transition to AI systems could heavily impact central banks. Blockchain technology, for example, operates independently of central financial institutions, while cryptocurrencies can be transferred directly between individuals without the need for intermediaries like traditional financial institutions. 

Financial technology has been exploring generative AI for automating operations processes, augmenting data collection, and developing new products. Forbes suggests that industries such as Information Technology (IT), Marketing, Customer Service, and Operations may be most impacted by AI development. 

Combining human and AI strengths can be valuable for startups and established firms. AI systems can handle repetitive and predictable tasks, freeing employees to focus on more complex business ventures. Furthermore, AI-powered tools like automated video captioning and voice photo descriptions can expand a company’s reach into new consumer markets. 

AI tools are now integrated into compliance processes, with private sector companies advocating for regulations to govern their use. Generative AI is gaining popularity in content creation, while chatbots are used in customer service to handle routine inquiries.  

Regulations Help Keep the Use of AI Ethical 

With the rapid evolution of AI, conversational systems may introduce more human-like sentiments. However, caution is needed when incorporating AI into financial processes due to the risk of biased data and errors.  

Biased data used to teach AI systems may lead to flawed insights that perpetuate societal inequalities and create blind spots in marketing predictions. Moreover, AI systems are only as capable as the human minds behind their processes, leaving them potentially vulnerable to human error. As such, it is crucial to blend AI tools with human oversight, correct possible blind spots, and account for data bias when implementing AI into financial processes. 

Establishing regulations to oversee AI’s data selection process, algorithmic design, and testing parameters is vital for the ethical and responsible development and deployment of AI systems. Still, implementing regulations could increase the cost of AI technology packages for smaller financial firms, leading them to move forward without adequate safety guidelines, which is why balancing promoting innovation and protecting the public interest is essential. 

Creating a collaborative environment between regulatory bodies and the private sector is crucial to develop policies that promote innovation while ensuring ethical considerations. For example, the European Union’s General Data Protection Regulation (GDPR) has been a step in the right direction in protecting consumer data privacy.  

Implementing consistent and standardized laws worldwide would strengthen ethical standards in the development and deployment of AI. To achieve this, companies must prioritize transparency in their AI systems by disclosing the collected data types and their use in developing AI models and establishing clear lines of accountability and responsibility in case of AI system malfunctions. 

AI technology can be harnessed to drive growth and innovation and potentially transform the fintech industry, but it is essential to prioritize ethical considerations, including data privacy and bias, to avoid perpetuating societal inequalities. Companies must work closely with regulatory bodies to establish policies that promote innovation while protecting the public interest.  

AI should be viewed as a tool to enhance the capabilities of human advisors, rather than one which will eventually replace them entirely. By taking a cautious and informed approach, businesses can harness the power of AI to drive growth and innovation while minimizing potential risks. 

 
 
The author, Sandy Fliderman is an experienced CTO and entrepreneur specializing in cutting-edge technology, big data analytics, and large-scale operational systems. Sandy is currently the Co-Founder and President of Industry FinTech (“IFT”), a digital back-office platform for funds, SPVs, REITs, deals, and private companies. 

Tags: AIAI and ComplianceContributed ContentFintechIndustry FinTech

RELATED POSTS

Contributed Articles

FTX No More: Why Better Compliance is the Answer

March 2, 2023
Contributed Articles

What 2023 Means for Commercial Construction Lending

February 23, 2023
Contributed Articles

Cybercrime and Cyber Risk: Strategies for Protecting Your Organization

February 2, 2023

TRENDING NOW

  • Cybercrime and Cyber Risk: Strategies for Protecting Your Organization

    504 shares
    Share 202 Tweet 126
  • Arizona’s Motor Vehicles Department (MVD) Makes Payment Offerings More Accessible

    657 shares
    Share 263 Tweet 164
  • Digital Content – The Missing Link in Your Portfolio (Part 2)

    580 shares
    Share 232 Tweet 145
  • Financial Technology: Cyberattack Insurance, Using Data to Combat Money Laundering and Other News

    562 shares
    Share 225 Tweet 141
  • What 2023 Means for Commercial Construction Lending

    515 shares
    Share 206 Tweet 129

CONNECT WITH US

Advertisement Banner Ad Advertisement Banner Ad Advertisement Banner Ad
Advertisement Banner Advertisement Banner Advertisement Banner

BECOME AN INSIDER

Get Financial Technology Today news and updates in your inbox.

Strategic Communications Group is a digital media company that helps business-to-business marketers drive customer demand through content marketing, content syndication, and lead identification.

Related Communities

Future Healthcare Today
Government Technology Insider
Modern Marketing Today
Retail Technology Insider
Today’s Modern Educator

Quick Links

  • Home
  • About
  • Contact Us

Become a Sponsor

Financial Technology Today offers content and advertising sponsorships to leading technology solution and service providers. Interested in becoming a sponsor? Contact us!

© 2023 Strategic Communications Group, Inc.
Privacy Policy      |      Terms of Service

No Result
View All Result
  • Home
  • About
  • Banking
  • Insurance
  • Categories
    • Digital Transformation
    • Customer Experience
    • Cybersecurity & Risk
    • Regulation & Compliance
    • Claims Management
  • Contact Us