ICBA: Agencies don’t need specific regulations on AI

ICBA said the Treasury Department and federal banking agencies do not need to issue specific regulations to govern artificial intelligence usage because overly prescriptive regulations may stifle the use of AI in the banking sector.

Background: ICBA responded to a request for information from the Treasury Department regarding how artificial intelligence is being used within the financial services sector. The RFI included questions on the opportunities and risks presented by applications of AI within the sector.

Details: In its comments, ICBA said:

• Agencies have already issued guidance on modeling and other subject matters that can incorporate AI tech.

• Bank uses of AI include automating back-office function, chatbots, underwriting, and cybersecurity.

• AI may offer enhanced monitoring and reporting by analyzing large amounts of transactional data in real time, quickly spot behavior patterns, and generate automated reports that respond to a specific AML/CFT regulatory requirement.

• Existing data privacy protections are not necessary at this time because current Gramm-Leach-Bliley Act requirements are flexible and sufficiently robust to ensure consumer data is protected.

More: ICBA has noted that banks are early adopters and have effectively integrated AI and machine learning into their operations while prioritizing safety and soundness. ICBA opposes laws, regulations, or guidance that could lead to the commoditization of lending and other services and products offered by community banks.