The Government has published a white paper setting out a new approach to regulating AI in such a way as to build public trust in new technologies. The paper proposes 5 principles to guide the use of AI in the UK and says that relevant regulators will issue practical guidance to organisations. There will be a new sandbox for businesses to test how regulation would be applied to AI products and services.
In relation to financial services, the paper recognises that the regulatory framework provides some levels of regulation, but notes that risks still arise across, or in the gaps between, existing remits. It appreciates it is implement to have consistent regulation that does not force small businesses to comply with a number of disparate requirements. It gives an example of a firm looking to design an AI-driven algorithm to set insurance premiums that accurately reflect a client’s risk. It notes the range of legal frameworks the company would need to consider, and the challenges of identifying what is relevant and how properly to apply the relevant rules.
The Government is seeking feedback until 21 June.