FCA speaks on balance between AI and humans

Dominic Holland of the FCA has spoken on how the financial markets must both harness the opportunities that AI and advanced analytics present while recognising that human expertise and judgement are key to making these innovations enhance the sector’s strengths.

The FCA has put in place several initiatives and sandboxes to encourage firms to develop and deploy AI-based solutions in a safe framework, but is clear that good governance, oversight and testing is as crucial when using technology as in any other method of business – following its technology-agnostic approach.

He stressed that responsibility for AI models and their behaviour is with firms – and that having a human in the loop is essential, for example to recognise deceptive or wrong behaviour that a machine may not.

He them explained how the FCA’s Market Oversight division needs to evolve its use of technology to deal with the transaction reports it receives – and said it will soon be consulting on improving the transaction reporting regime.