AI regulation in the banking and financial sector

The financial services sector is fertile ground for the emergence and development of innovative solutions based on artificial intelligence, including machine learning, which already has a number of applications in the market and is growing rapidly. Financial institutions have an incentive to use AI and machine learning, which provide many advantages such as cost reduction, process automation, risk-management optimization, improved productivity, and increased profitability. AI and machine learning are already being used in the financial markets, in particular with respect to investment, fraud management and lending.

In July 2024, the long-awaited Regulation (EU) 2024/1689 (EU AI Act) was officially published, providing for a comprehensive horizontal legal framework for the regulation of AI systems across the EU. Nevertheless, financial regulations in some cases already provide a framework for the use of artificial intelligence by financial institutions (algorithmic trading, credit scoring, etc.). In addition, the use of artificial intelligence by financial companies also impacts their prudential obligations and conduct of business requirements, which derive from their prudential status. Finally, where personal data are processed, GDPR needs to be complied with and particular questions may arise with regard to legal basis and automated decision-making.

During this webinar, Nicolas Kalokyris, Lead Lawyer at DLA Piper UK LLP (Financial Services & Fintech) and Heidi Waem, Partner at DLA Piper UK LLP (Data, Privacy & Cyber) will present the main use cases for artificial intelligence in the banking and finance sector and outline the legal and regulatory considerations involved.

Join us during this webinar to learn about:

• The state of play of AI in the financial sector and new use cases (credit scoring, KYC, fraud detection, transaction monitoring, robo-advisory, chatbots,…);
• The current and future financial regulations applicable to FS firms using AI (outside of the AI Act);
• How should FS firms assess the impact of the use of AI with regard to their prudential requirements and rules of conduct;
• How should FS firms prepare for the application of the AI Act;
• How to structure the legal basis for data processing when training models;
• How will the use of AI be supervised in the financial sector and how AI is used for financial supervision (including the most recent SupTech initiatives).