The ChatGPT artificial intelligence (AI) tool, released by OpenAI last November, has generated interest around the world, and Taiwan is no exception.
Such tools have the potential to change many aspects of people’s lives, from work and healthcare to home life. The question is, do they do people more good than bad, or vice versa?
AI refers to the ability of computers to mimic the abilities of the human mind, such as learning, cognition, problem solving, and natural language understanding. This entails the potential for computers to perform the same tasks as humans or even surpass human intelligence. This is underpinned by technical improvements and enhancements in data analysis.
A few years ago there was no sign of the “AI era” really starting, but today, with ChatGPT, AI is truly tangible for everyone for the first time. Something like ChatGPT isn’t perfect yet, but what’s important is the progress and direction in the development of human-like machine intelligence. In fact, OpenAI’s voice and text-based chatbots are attracting significant interest from various industries, with companies rushing to integrate the technology into their products, including those in the financial industry.
AI technology can help the financial industry in many areas, including customer service, marketing, automation, investment advice, fraud detection, and risk management.
But the Financial Supervisory Commission said last week that it could also help criminals pose a greater threat to financial institutions through data breaches, privacy breaches and more. Regulators have asked local banks and financial service providers to closely monitor his use of AI tools to ensure data security. He told lawmakers on the parliamentary finance committee that he plans to issue guidelines for the responsible use of AI by local financial institutions as early as August.
After Singapore last year set “fairness, ethics, accountability and transparency” principles for the use of AI in the financial industry, the commission said it would also set principles for local financial institutions to follow. . In short, if financial institutions want to employ AI tools in their business operations, they need the ability to control the technology and determine the level of risk they are willing to take. They will also be held responsible for any accidents.
The Securities and Futures Authority has proposed tighter oversight of AI-powered investment consulting services offered by local brokerages after excitement over so-called robo-advisors sparked a surge in business over the past year. In the first quarter of this year, 167,000 assets managed by the robo-advisor program amounted to TWD6.9 billion (US$225.33 million), up 42% year-on-year.
The commission does not appear to be drafting a specific law to regulate the use of AI in the financial sector for the foreseeable future. Instead, it focuses on establishing self-regulatory mechanisms for service providers that allow financial institutions to monitor their own legal, ethical, and security standards.
While the Commission has taken a non-interfering approach on this issue, it should guide financial institutions to establish robust protection mechanisms against potential harm from the use of AI. In the meantime, you should consider whether you will eventually need the reins to keep up with international developments and the demands of the financial industry.
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