U.S. Treasury Secretary Janet Yellen underlined in a recent speech the major hazards connected to the growing financial industry usage of artificial intelligence (AI). Speaking at a financial technology conference, Yellen underlined the need of strict regulatory control to control the possible risks AI offers and also acknowledged its transforming power for increasing financial services' efficiency and innovation.
Yellen noted that although artificial intelligence offers significant difficulties even if it can improve risk management, fraud detection, and customer service. Among them are issues with data privacy, possible algorithmic biases, and systemic failure risk. She underlined that the acceptance of artificial intelligence without appropriate protections can have unanticipated effects including financial instability and more exposure to cyberattacks. Yellen urged officials, financial institutions, and technology companies to work together to create strong systems guaranteeing responsible application of artificial intelligence.
The comments of the Treasury Secretary coincide with a period when the financial sector is fast including artificial intelligence-driven technologies into many facets of their activities. From tailored banking apps to algorithmic trading, artificial intelligence is leaving its mark in finance. Yellen's cautious approach, however, emphasizes the need of juggling creativity with restraint. She advised legislators to keep ahead of the curve by using adaptive rules that would change with technical developments to safeguard consumers and preserve financial stability.
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