PYMNTS MonitorEdge May 2024

Treasury Seeks Comments on ‘Responsible Innovation’ Using AI in Financial Services

The Treasury Department is seeking comments from the public about the use of artificial intelligence (AI) in the financial services sector.

The agency released a request for information on Thursday (June 6) and said it encourages the submission of comments within 60 days, according to a Thursday press release.

The request for information encompasses “uses, opportunities and risks of artificial intelligence in the financial services sector.”

“Treasury is proud to be playing a key role in spurring responsible innovation, especially in relation to AI and financial institutions,” Nellie Liang, under secretary for domestic finance, said in the release. “Our ongoing stakeholder engagement allows us to improve our understanding of AI in financial services.”

The agency aims to learn how AI is being used in the sector, what opportunities and risks it presents, what obstacles are slowing the responsible use of AI, and what enhancements can be made to legislative, regulatory and supervisory frameworks, according to the release.

The Treasury Department is especially interested in learning how AI can be used to deliver inclusive and equitable access to financial services, per the release.

“The Biden administration is committed to fostering innovation in the financial sector while ensuring that we protect consumers, investors and our financial system from risks that new technologies pose,” Liang said in the release.

Comments submitted in response to the request for information will be publicly viewable on www.regulations.gov.

This announcement comes on the same day that Treasury Secretary Janet Yellen told attendees at a conference that the rapid evolution of AI presents both risks and opportunities for financial institutions.

In excepts from Yellen’s speech released before her appearance Thursday at the Financial Stability Oversight Council (FSOC) 2024 Conference on Artificial Intelligence & Financial Stability, Yellen said, “The tremendous opportunities and significant risks associated with the use of AI by financial companies has moved this issue toward the top of Treasury’s and the Financial Stability Oversight Council’s agendas.”

PYMNTS Intelligence has found that 83% of bank executives are eyeing generative AI with both hope and hesitation.

While the technology is rapidly gaining traction in the financial services sector, executives worry about the risk of spreading financial misinformation and exposing sensitive data to security breaches, according to “Banking on AI: Financial Services Sector Harnesses Generative AI for Security and Service,” a PYMNTS Intelligence and AI-ID collaboration.