Banks must take responsibility when using AI: EU

Banks and investment firms in the European Union cannot OpenAl strikes deals with The boardroom has a legal obligation to protect customers when using artificial intelligence (AI), the bloc’s securities watchdog said in its first statement on AI.

The European Securities and Markets Authority (ESMA) set out how financial firms regulated in the 27-country bloc can use AI in day-to-day operations without falling foul of the EU’s MiFID securities law.

While AI holds promise in enhancing investment strategies and client services, it also presents inherent risks, and the potential impact on retail investor protection is likely to be significant, ESMA said.

“Importantly, firms’ decisions remain the responsibility of management bodies, irrespective of whether those decisions are taken by people or AI based tools,” ESMA said.

“Central to the use of AI in investment services is the unwavering commitment to act in clients’ best interest, an overarching requirement which applies irrespective of the tools that the firm decides to adopt in the provision of services.”