The European Union has proposed a rule that would impose data-quality, testing and oversight requirements on artificial intelligence systems deemed to be high-risk. Companies could be fined as much as 6% of their annual worldwide revenue for violations.
The plan is of interest to the many banks developing AI technology. It would apply directly to banks that do business in the EU, and similar rules may be adopted in the United States — perhaps in the same way that Europe’s data-privacy regulation has been mimicked by several state governments.
"Because they are the first hard-law regulations, the European Commission proposal is likely to become a model for the rest of the world," said Will Uppington, co-founder and CEO of the AI software company TruEra.
The proposal comes just weeks after >U.S. bank regulators requested information about U.S. banks’ use of AI.
“The EU’s announcement that it will regulate AI use across sectors reflects just how important it is that we understand AI’s potential risks and benefits,” said Melissa Koide, CEO of FinRegLab, a nonprofit research group in Washington that tests new technologies and data to inform public policy. “Research suggests artificial intelligence and machine learning can create measurable benefits including financial inclusion, yet we also know it can bake in and even exacerbate historical bias and exclusion.”