Uncle Sam Gathering Info on AI in Finance

The U.S. Treasury Department seeks feedback on artificial intelligence financial risks.

With more companies applying artificial intelligence tools and applications to the financial side of their businesses and financial services firms applying AI to client investments, the U.S. government says it wants more information on how those trends progress.

On June 6, the U.S. Treasury Department requested information on “uses, opportunities, and risks of artificial intelligence” in the financial services realm. In establishing public comments on the issue, the federal agency seems to be zeroing in on existing AI tools and technologies that are used by and benefit the financial services industry.

Treasury “seeks to increase its understanding of how AI is being used within the financial services sector and the opportunities and risks presented by developments and applications of AI within the sector,” the agency said in an RFI statement. That coverage is expected to target “potential obstacles for facilitating responsible use of AI within financial institutions, the extent of the impact on consumers, investors, financial institutions, businesses, regulators, end-users, and any other entity impacted by financial institutions’ use of AI, and recommendations for enhancements to legislative, regulatory, and supervisory frameworks applicable to AI in financial services.”

The agency says it’s particularly interested in gathering a “broad range” of perspectives on this topic and is “particularly interested in understanding how AI innovations” can benefit financial services consumers across the U.S.

“Treasury is proud to be playing a key role in spurring responsible innovation, especially about AI and financial institutions,” noted under-secretary for domestic finance Nellie Liang. “Our ongoing stakeholder engagement allows us to improve our understanding of AI in financial services. We’re committed to fostering innovation in the financial sector while protecting consumers, investors, and our financial system from risks that new technologies pose.”

Queries included in the RFI include the following, according to the agency:

— Asking for feedback on any AI models that financial institutions are currently using.
— Whether AI use cases differ within institutions.
— What barriers small banks face in AI deployment.
— How AI has benefited low-to-moderate-income consumers and/or underserved individuals and communities.
— The extent to which AI models are developed in-house, by third parties, or via open-source code.
— How industry is applying risk management frameworks to AI usage.

A Big Priority For the Treasury

Treasury Secretary Janet Yellen has been affirming the federal government’s desire to balance opportunity with tough compliance in the finance sector. In a Washington, D.C. speech on June 5, Yellen touched on multiple AI risks on the Treasury’s radar screen in 2024.

“Specific vulnerabilities may arise from the complexity and opacity of AI models; inadequate risk management frameworks to account for AI risks; and interconnections that emerge as many market participants rely on the same data and models,” Yellen said. “Concentration among vendors developing models, providing data, and providing cloud services may also introduce risks, amplifying existing third-party service provider risks. And insufficient or faulty data could also perpetuate or introduce new biases in financial decision making.”

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