The Financial Conduct Authority and the Office of the Information Commissioner will develop new rules on the use of AI in financial services companies.
“To support good practice in the future, we will develop legal codes of practice for organizations that make AI or deploy AI and automated decisions – enabling innovation while protecting privacy,” said FCA CEO Nikhil Rathi and UK Information Commissioner John Edwards in a joint statement.
FCA and ICO said regulations are not the main blocker of innovation, but the enabler.
“Do it right, regulations are not the brakes of innovation. It’s a bridge that connects creativity with public trust. Taking the right approach, regulations become a promoter: providing certainty that companies need to invest, experiment and grow.”
A roundtable was held last month with industry leaders to better understand the challenges companies face when deploying artificial intelligence (AI) and how FCA and ICO support responsible innovation and personal information use.
While companies understand a broad range of rules, companies want to make clearer “the benefits in practice” and more opportunities to engage in building confidence in trying new technologies.
To support good practice, the progressive FCA and ICO will develop legal codes of practice for organizations that make or deploy AI and automated decisions.
Additionally, both will help companies develop, test and evaluate AI as part of the FCA AI lab.
The FCA also plans to hold a roundtable with smaller companies later this year to better understand the challenges of AI adoption, while the Digital Regulatory Cooperation Forum has committed regulators to collective understanding of how our regulatory regimes for each other apply to AI and work to identify and resolve any conflicts.
In a statement by Rathi and Edwards, it highlights the company’s concerns about who is responsible when developing AI in third parties.
To this end, it noted that the ICO released a detailed analysis of allocating control in the Generating AI supply chain link, while the FCA provided information about corporate responsibilities when seeking to adopt Generating AI.
It also highlighted that additional support has been introduced to help companies, including digital sandboxes, supercharged sandboxes and real-time AI testing within the FCA Innovation Center.
ICO also provides innovation consulting services, regulatory sandboxes and innovation centers under the Innovation Services link.
Although these can be used, the FCA and ICO show that it will increase visibility of these services and SIGNPOST actually helps.
At the end of their statement, Rathi and Edwards called on companies and trade institutions to “continue to talk” not only when there is a problem, real or perceived, but also on the journey of innovation.
“We can help businesses do different things. But we need their insight to do better,” the statement said.
“With regulation agility and confidence in innovation and investment in new technologies, businesses will provide the UK with fuel to power economic growth.”
