Financial system ‘may not be prepared for AI incidents’

“WORRYING” evidence that the UK’s financial system should be more prepared for the risks of Al-driven market shocks has been highlighted by an influential committee of MPs.

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Not enough is being done by regulators to manage risks from increased use of AI (artificial intelligence) in the financial services sector, the Treasury Select Committee said.

The committee said it had received a “significant volume of evidence” about Al's risks to financial services consumers.

It heard concerns about a lack of transparency in Al-driven decision-making in credit and insurance; concerns about financial exclusion for the most disadvantaged customers; concerns over people being misinformed by unregulated advice from AI search engines; and concerns that Al use could drive up fraud.