In an interview, Gary Gensler stresses that the potential of AI to cause future financial crises should not be underestimated. It therefore calls for strong regulation to minimize the risks.
The dangers of Artificial Intelligence in finance
Gary Gensler, Chairman of the SEC of the United States, warns that artificial intelligence AI could be at the heart of the next financial crises. He voiced his concerns about AI during a interview with DealBook. He said the rise of generative AI tools suggests the technology is poised to transform business and society.
Gensler pointed out that ” this technology will be the center of future crises, future financial crises… It has to do with this powerful set of economies linked to scale and networks. »
One of its main concerns is the risk that some AI models may favor corporate interests over those of investors. This could indeed create conflicts of interest. The SEC wants to fix this by proposing a rule to eliminate potential conflicts of interest related to this technology.
Gensler is also concerned that generative AI, like ChatGPT, could provide erroneous financial advice. He emphasized that investment advisers have a duty of fiduciary duty of care and loyalty to their clients. This duty applies even with the use of algorithms.
According to him, it makes sense to require companies to take security measures. This could help prevent chatbot users from delegating responsibility to AIs. He pointed out that the parameters of these models are set by the humans who designed them.
Centralization of AI and Vulnerability of the Financial System
The SEC Chairman also highlighted the risk of increasing concentration around a few dominant AI models. Indeed, this could increase the vulnerability of the financial system. The greater the centralization of the system, the more everyone depends on the same information. Therefore, it could lead to an impending financial crisis.
Despite these concerns, Gensler recognizes that AI will continue to significantly transform science, technology and business. Moreover, he believes that the SEC could benefit more from the use of AI, in its role. However, he insists on the need for strict regulation in order to minimize the associated risks.
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