Consumer Reports memo highlighting ten key actions state financial regulators can take to help ensure fair and responsible use of Artificial Intelligence and Machine Learning (AI/ML) in the financial sector.
CR’s memo points out that there are a wide range of AI use cases in finance, ranging from powering digital chatbots and virtual assistants, to augmenting or even automating credit underwriting, to targeted marketing and fraud monitoring.
But in almost every application it is deployed, AI/ML can be a double-edged sword. The same AI use cases that can benefit consumers may also pose risks depending on how AI/ML is deployed.
For example:
- AI/ML models that can increase access to finance can also perpetuate and exacerbate bias against vulnerable segments of the population.
- Digital targeted marketing can be used for aggressive marketing of predatory products that exploits consumers’ behavioral biases.
- GenAI-enabled chatbots may allow for quicker responses to customer service queries, but may also result in inaccurate responses or prevent consumers from reaching live agents to resolve urgent matters.