Fitch warns of challenges as AI integrates into financial institutions
Date
2/28/2024 2:02:39 AM
(MENAFN) Fitch Ratings highlighted in a report on Tuesday that the swift progress and widespread integration of artificial intelligence (AI) present certain obstacles for financial institutions.
"AI, which encompasses technologies including machine learning (ML), deep learning, natural language processing, robotics, expert systems and fuzzy logic, can improve operational efficiency and reduce costs for financial institutions," the report noted.
"However, AI technology can lack transparency in explaining its decision process, leading to the potential for inadvertent discrimination," it further mentioned.
Fitch also pointed out that among the challenges are issues related to data privacy and security, as well as the risk of selection bias. Moreover, increased regulatory scrutiny is another aspect that financial institutions need to consider when implementing AI technologies.
Additionally, Fitch cautioned that sectors with lower regulatory oversight may witness greater adoption of AI, which could potentially lead to heightened criminal activity.
"Criminals may attempt to reverse-engineer or hijack AI models if ransoms are not paid; taint or manipulate data used to train models; or steal algorithms or data," the rating agency pointed out. "Cyber criminals may also use AI themselves to attack IT systems."
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