Digitalisation of banking creating new risks – New EU report on AI
Digitalisation of banking creating new risks – New EU report on AI
A new European Union Artificial Intelligence (AI) rule is set to come into force, the World Economic Forum has said.
The rule is a warning over the digitalization of finance and banking.
The Basel Committee on Banking Supervision, a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten countries in 1974, has warned about the safety implications of the digitalisation of the banking system.
In a new report, the Committee said this was creating new vulnerabilities and amplifying existing ones, and that new rules might be needed to tackle these emerging threats.
New EU #AI rules set to come into force; Warning over #digitalization of finance and banking; UK communications regulator strengthens #digital safety code of conduct. Discover our digital #technology round-up from Cathy Li bringing you the key stories from the last fortnight.…
— World Economic Forum (@wef) June 4, 2024
“The growth of cloud computing, the rise of AI and the sharing of data by external fintechs, among other areas, all create new risks.
“These can include greater strategic and reputational risks, a larger scope of factors that could test banks’ operational risk and resilience, and potential system-wide risks due to increased interconnections,” the report said.
Below is the full statement…
EU’s new AI rules set to enter into force, and other digital tech stories to read
AI capabilities have expanded rapidly in recent years. Image: Our World in Data
2. Digitalization of banking creating new risks
The Basel Committee on Banking Supervision has warned about the safety implications of the digitalisation of the banking system. In a new report, the Committee said this was creating new vulnerabilities and amplifying existing ones, and that new rules might be needed to tackle these emerging threats.
The growth of cloud computing, the rise of AI and the sharing of data by external fintechs, among other areas, all create new risks.
“These can include greater strategic and reputational risks, a larger scope of factors that could test banks’ operational risk and resilience, and potential system-wide risks due to increased interconnections,” the report said.
The Committee is comprised of central bankers and regulators from the G20 and other economies whose members are committed to applying its rules.
3. News in brief: Digital technology stories from around the world
Microsoft has partnered with a UAE-based AI firm to invest $1 billion in a data centre in Kenya.
The EU’s data privacy watchdog has warned that OpenAI is still not meeting data accuracy standards.
Research has used AI to identify as many as 40 fake paintings for sale on eBay, including items purportedly by Monet and Renoir, The Guardian reports.
The UK’s communications regulator Ofcom has launched a new safety code of practice warning social media firms to “tame aggressive algorithms” that recommend harmful content to children.
The House Foreign Affairs Committee has voted to advance a bill that makes it easier to restrict the export of AI systems.
A global AI summit, co-hosted by South Korea and the UK, closed with pledges to develop the technology safely from both the public and private sectors.
OpenAI has announced a new Safety and Security Committee that will be led by board members as it begins training its next AI model.
Uptake of Generative AI tools has been slow, a survey of 12,000 people in six countries finds, but is strongest among 18-24-year-olds.
4. More about technology on Agenda
For businesses to close the gap between promise and reality on generative AI, they need to focus on return on investment, writes Daniel Verten, the Head of Creative at Synthesia. This includes establishing clear business objectives and ensuring GenAI solves challenges from end to end.
Climate change poses a risk to agriculture, with innovative solutions essential to protect crops without harming the environment. AI can help accelerate these solutions, explains Tom Meade, Chief Scientific Officer at Enko Chem.
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