AI Consortium discovers public-private chairs
The Bank of England and Financial Conduct Authority have launched an AI Consortium. It gives finance experts a place to discuss artificial intelligence without first pretending the chatbot invented compound interest.
The group will examine how firms use AI, plus the benefits, risks and technical changes. Its members come from industry, academia, regulation and the thriving sector that supplies nameplates to round tables.
Artificial intelligence may improve services and analysis. It may also create risks across firms and the wider financial system, particularly if someone asks it to maximise shareholder value before explaining weekends.
“Our model can forecast six market scenarios,” said Peregrine Spreadsheet, Deputy Governor for Synthetic Biscuits. “Unfortunately, all six end with Compliance asking who approved the model.”
The consortium aims to inform the regulators’ approach and encourage safe adoption. That means innovation may proceed at speed, provided it carries identification and waits behind the velvet rope marked GOVERNANCE.
During its first exercise, an algorithm studied centuries of banking. It concluded that every crisis begins with a confident man describing a risk as technically impossible.
The machine then requested voting rights. Members referred the question to a subgroup, fulfilling its prediction that any finance meeting eventually manufactures another finance meeting.
Read the real story: the Bank of England’s introduction to the AI Consortium.
The consortium will help regulators understand what firms are building before the firms explain it using a slide headed Opportunity. That is valuable public work. By the time the final report appears, the algorithm hopes to have learned the central lesson of finance: every bold innovation becomes a committee once somebody asks for the minutes.
