The Bank of England and The Financial Conduct Authority launched a discussion paper on the topic of Artificial Intelligence and Machine Learning to discuss the regulation of AI in UK finance.  

Link: AI and UK finance regulations discussion paper 

Topics include: -  

Executive summary 

• Benefits and risks related to the use of AI in financial services  

• How existing legal requirements and guidance apply to the use of AI  

• Discussion questions for stakeholder input  

Introduction  

• Background 

Supervisory authorities’ objectives and remits  

• Why the supervisory authorities have an interest in AI  

• What is AI? 

• How AI is used in financial services  

• Questions: Supervisory authorities’ objectives and remits  

Potential benefits and risks 

• Consumer protection – FCA 

• Competition – FCA 

• Safety and soundness - PRA and FCA 

• Insurance policyholder protection – PRA and FCA  

• Financial stability and market integrity – the Bank and FCA 

• Questions: Benefits, risks and harms of AI  

Regulation  

• Introduction  

• Consumer protection – FCA 

• Competition – FCA and PRA 

• Safety and soundness: Data – PRA and FCA 

• Safety and soundness: Model risk management – PRA 

• Safety and soundness: Governance – PRA and FCA 

• Safety and soundness: Operational resilience, outsourcing, and third-party risk management – PRA and FCA 

• Questions: Regulation 

Questions 

• Supervisory authorities’ objectives and remits  

• Benefits, risks and harms of AI  

• Regulation