Artificial intelligence and Big Data
Artificial intelligence (AI) is one of the most promising new technologies of the digital transformation as far as financial institutions are concerned, but public debate is fraught with questions about how data are sourced and used. The Swiss Bankers Association is evaluating in depth how to harness the competitive potential while preserving customers’ trust, and it is making a valuable contribution to responsible policies in this area.
Customers place a great deal of trust in Swiss banks on account of the first-class services they provide. At the same time, however, the banks operate in a fast-moving and competitive environment in which pressure on margins is high. Responsible, risk-free access to data and fundamental technologies such as AI will in future be a decisive success factor.
AI already in use
AI is used to optimise business processes and for strategic planning because it helps in gaining a clearer picture of the future and thus improving customer service and profitability while reducing risks and costs. Open finance is a catalyst for future-proof business models and thus a key driver of AI usage.
AI is already being put to use in many areas. For example, it has become indispensable in fighting financial crime.
Training algorithms requires large volumes of data and considerable computing power, which can only be provided cost-efficiently via the cloud. The challenges arising as a result are the subject of broad political debate, and the Federal Council addressed them in detail in a report. Systematic bias, difficulty in verifying results and autonomous decision-making are potential error sources.
Numerous challenges
It is vital for Swiss banks to ensure that the main risks associated with using AI are adequately addressed. Specific issues include the application of rules to safeguard basic rights as well as security and questions of liability.
The SBA is playing its part in overcoming the most important challenges, which include the following:
- responsible use of AI, especially with regard to protecting privacy and data security
- technical implementation of AI, which requires the banks to build up the necessary capabilities
- legal risks and potential damage to banks’ reputations
The international debate on AI regulation is gaining momentum. The European Commission’s High-Level Expert Group on Artificial Intelligence (AI HLEG) is likely to influence future regulation with its Ethics Guidelines for Trustworthy AI, as are the principles outlined in the white paper on AI that the Commission published at the start of 2020.
While it is important for Switzerland to act as an opinion leader in these discussions, the financial world faces questions that need to be answered as soon as possible. Existing principles are proving to be a useful resource and reference for financial service providers when it comes to using this technology safely.