11.8 C
New York
Thursday, December 3, 2020
Home STARTUPS Finance AI as a blueprint for fintech startups

AI as a blueprint for fintech startups

While most startup founders would prefer not to pore over laws, regulations and interpretive materials to design a perfect product, it’s an essential exercise for those developing financial services solutions. For fintechs and the other finserv-related startups (e.g., regtech, suptech, etc.) understanding the regulatory obligations of customers and prospects will be core to your mission. In some cases, the process of interpretation and analysis might be a heavy lift involving expert outside counsel, lobbying efforts, and specialized consulting services.

A complicating factor for any fintech looking to solidify its understanding of regulatory paradigms is the gray area where regulators have issued cursory guidance, or no guidance at all. One gray-ish realm where financial services regulators have shown interest, but are largely treading lightly, has been offering guidance about the use of artificial intelligence (“AI”). However, a few regulators are now applying institutional and intellectual rigor to the subject given its use in almost every aspect of banking and finance.

In June, the Financial Industry Regulatory Authority’s (“FINRA”) Office of Financial Innovation issued a report called “Artificial Intelligence in the Securities Industry.”1 FINRA is the self-regulatory organization responsible for oversight of broker-dealers in the United States — in simpler terms, it regulates the big and small brokerage firms that offer financial advice. FINRA has consistently been one of the more technologically engaged regulators — in 2018 they solicited industry comments on AI, which led to the report, and produced reports on the use of regulatory technology and selected cybersecurity practices. (The U.K.’s FCA as well as the CFTC in the U.S. have also been key boosters for innovation in financial services, including the use of AI.)

FINRA’s AI Report is particularly interesting for fintechs since it explores how firms (read: fintech clients) are deploying AI as well as the agency’s expectations for AI oversight. Fintechs can use this report as a blueprint — identifying areas for potential AI product growth and as a guidepost for the regulatory and operational concerns that firms, and by extension fintechs themselves, must manage when implementing AI.

Source: TechCrunch


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisment -

Most Popular

100% tax exemption for private bus operators in Punjab

The Punjab cabinet approved on Wednesday a tax exemption of 100 per cent for private buses, a move aimed to support the transport sector...

Tata-Mistry case: SC to hear matter on Dec 8

The Supreme Court Wednesday said it would hear on December 8 the cross appeals filed by Tata Sons and Cyrus Investments against appellate tribunal...

PM briefed on internal security situation at DGPs meet

Prime Minister Narendra Modi was Wednesday briefed on the country's internal security situation and how to improve it by taking people- friendly initiatives. A review...

Modi should directly hold talks With protesting farmers but he wont, He never had a single press conference in last 6 years, not even...

The Centre must suspend the three "black" farm laws without delay and Prime Minister Narendra Modi should directly hold talks with the protesting farmers,...

Recent Comments

%d bloggers like this: