WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with the release of a new fact sheet on Artificial Intelligence (AI) and a comment letter sent to the U.S. Department of the Treasury on the same subject.

“AI has found its way into nearly every aspect of Main Street Americans’ daily life from technology that provides real-time driving directions to language translation to weather forecasts. Financial services companies have also started using AI in all corners of the banking, investment, and financial services sectors. Many uses of AI are helpful for consumers, financial companies, and society as a whole because AI, safely deployed, can increase efficiency, enhance risk management, and improve financial performance and outcomes. However, AI also poses serious risks and threats to consumers and financial stability in the form of fraud, discrimination, market crashes, and illegal activity.

“Innovation—related to AI or any other genuine technological advances—is the fuel that drives our economy, wealth creation, and rising living standards. However, bad actors, short-term thinking, or just development gone out of control can set that all back as the trust and confidence of the public, investors, markets, and governments are undermined if not destroyed. The AI community should welcome the government’s investment of the time and resources necessary to ensure that AI has proper oversight and regulation. This will be one of the most important public-private partnerships ever. It’s the only way to get the maximum benefits from AI while minimizing the risks.

“In our comment letter to the U.S. Treasury, we recommend that financial regulators should take a variety of actions to allow for AI’s continued innovation while also prioritizing consumer protection, including:

• Coordinate communication about AI’s benefits and risks to facilitate appropriate actions by the public, regulators, and the financial industry;
• Increase funding to build staff, expertise, testing, and other capabilities to appropriately oversee and regulate AI and strengthen enforcement;
• Recognize and address the inherent data problems that permeate AI;
• Develop a pre-approval process for acceptable applications and uses of AI;
• Increase regulatory standards and enforcement to punish and deter violations, recidivism, and the attitude that such behavior is simply a cost of doing business; and
• Enhance public transparency around the enforcement of AI rules and regulations.

“Reasonable people will disagree about where and how to strike the balance, but no one should disagree with the need to strike a balance between the risks and benefits of AI, and a partnership is the best way to achieve that. Main Street Americans’ pocketbooks, retirement accounts, and consumer data, as well as broader financial stability, are depending on it.

Our fact sheet is available here and our comment letter is available here.

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.