Bridging the gap: Policymakers, innovation and privacy in financial services AI
Abstract
This paper explores the burgeoning use of artificial intelligence (AI) in the financial services industry, specifically focusing on the tension between its innovative potential and the protection of consumer data privacy. It delves into the recently enacted European Union (EU) AI Act, the first comprehensive AI regulation globally, analysing its provisions impacting the development and deployment of AI in financial services. In addition, this paper examines existing and emerging state laws in USA that address AI regulation, highlighting potential inconsistencies and the need for a more unified approach. Through this comparative lens, this paper discusses key challenges and proposes recommendations for how regulators may foster responsible AI use in financial services while safeguarding consumer data privacy. This paper also addresses how financial institutions can address the risks arising from the use of AI. This article is included in The Business and Management Collection (https://hstalks.com/business/).
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Author's Biography
William Nelson is the Director of Public Policy and Associate General Counsel of the Investment Adviser Association (IAA). For more than 85 years, the IAA has been advocating for advisers before Congress and US and global regulators, promoting best practices and providing education and resources to empower investment advisers to serve their clients. The IAA’s member firms manage more than US$35tn in assets for a wide variety of individual and institutional clients. Prior to joining the IAA, William served as the Chief Compliance Officer of Mercer Advisors, one of the largest independent SEC-registered investment advisers in US, where he served as the subject-matter expert on all legal and regulatory compliance issues. William previously served as the Assistant General Counsel and the Public Policy Counsel for the CFP Board and has held multiple roles as an attorney with both the US Department of Justice and Veterans Affairs. He currently serves as an adjunct professor at the Sturm College of Law, University of Denver, teaching securities law, previously taught at The George Washington University Law School. He also serves as the Chair for the DC Bars Corporation, Finance and Securities Law Community, and a member of the North American Securities Administrators Association’s (NASAA) Senior Issues Advisory Committee. William is regularly invited to speak at industry events and has been published in several scholarly law journals, and his work has been cited in legal treatises and state and federal court decisions. He received his undergraduate degree from the University of Tulsa, his JD degree (Hons) from The University of Tulsa College of Law and his LLM degree from The George Washington University Law School.
