Global: Fintech and AI Leaders Raise Concerns About Regulatory Challenges in Parliament

An assembly of leaders from the fintech and artificial intelligence (AI) sectors convened in the UK’s Parliament for a special discussion addressing the ethical and regulatory implications of these technologies within the country.

The event, titled “Fintech is Dead. Long Live FinAI,” was organized by the Parliament Street think tank and saw participation from over 70 industry experts, academics, and chief executives. The focus was on exploring the influence of AI on both the public and private sectors, a discussion timed ahead of Prime Minister Rishi Sunak’s global AI summit in November.

This event took place shortly after Gary Gensler, the head of the Securities and Exchange Commission, expressed concerns regarding the uncontrolled expansion of AI, cautioning that it was “almost inevitable” that this technology could trigger a financial crisis within the next decade.

During the Parliament summit, Michael Mortenson, Associate Professor at the Gillmore Centre for Financial Technology, emphasized, “We are witnessing the rise of genAI. Beyond mere image and text generation, genAI exhibits the clear potential to semi-automate a significant portion of the traditional knowledge work associated with finance roles, capable of working alongside human input and data analysis tools.”

Jamie Beaumont, founder of Playter, shared his perspective, stating, “One of the major challenges I encounter is regulating something that remains largely unpredictable. The trajectory of AI has seen dramatic developments over the past year, yet we are uncertain about its next steps and where AI will be in a year. How do we establish effective regulations under such circumstances?”

Dominic Duru, co-founder of DKK Partners, extended this viewpoint, saying, “If you cannot comprehend it, you cannot regulate it. The businesses themselves have a deeper understanding of what needs to be controlled.”

Gary Gensler also delved into a similar theme, highlighting the complexities of regulating AI. He noted that regulating AI is challenging because many financial institutions may be utilizing the same foundational models. Furthermore, these models may not be developed by the financial institutions themselves but rather by technology companies that fall outside the regulatory purview of the SEC and other Wall Street oversight bodies.

Gensler explained, “It’s a complex issue for financial stability since most of our regulations pertain to individual institutions, individual banks, individual money market funds, individual brokers. This matter involves a horizontal perspective in which many institutions may rely on a shared foundational model or data aggregator.”

Uday Samant, the Minister of Industries of Maharashtra, India, who attended the summit as part of a trade mission, advocated for closer collaboration between the UK and India on AI strategy. He suggested providing British companies with financial incentives to invest in India, discussing his country’s capabilities and plans for the development of a new AI park. Samant elaborated, “The government offers state-of-the-art infrastructure within the AI Park, including office spaces, research facilities, and laboratories equipped with the latest AI technology. This approach minimizes initial setup costs for companies.”