The Commodity Futures Trading Commission (CFTC) Commissioner, Christy Goldsmith Romero, recognizes the significant potential of artificial intelligence (AI) to benefit financial markets but acknowledges the associated risks.
“In terms of protecting financial stability, particularly where it comes to AI models, there can be great promise and great risk,” Romero stated.
CFTC Chief Urges Evaluation of Positive and Negative AI Aspects
Romero recently delivered a keynote at the Consumer Federation of America’s Financial Services Conference.
During the speech, Romero outlined that while AI has benefits it also comes with risks that must be addressed to enjoy the benefits:
“Artificial intelligence is a consequential technology that could aid in breakthroughs in areas like healthcare, mitigating climate change, cybersecurity, fraud detection, and more. However, we have to manage risks so that we can receive these promises.”
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Romero expressed her commitment to advocating for responsible AI.
Furthermore, she focused on maintaining fairness for all stakeholders through a transparent approach that can undergo regular audits and reviews.
“It means ensuring that AI algorithms and outcomes are transparent, explainable, and auditable,” she declared.
SEC Chairman’s Recent Alert on AI Risks in Financial Markets
This follows the Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, warning financial advisors about the use of AI.
Gensler expresses concern, particularly regarding the potential issues posed by AI’s predictive analytics tools. Furthermore, if they compromise the interests of customers:
“If a firm’s optimization function takes the interest of the firm into consideration as well as the interest of the investor, this can lead to conflicts of interest.”
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