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The European Commission has asked financial services companies to provide information that will inform its regulation of artificial intelligence (AI) in the sector.
A new consultation by the European Commission's financial services department (DG FISMA) asks financial services players, including payments and banking firms, for details on specific AI use cases, the opportunities AI brings, and the main challenges and risks, such as discrimination, opacity and control issues. It also explores barriers to AI development, including lack of skills and resources, technological readiness and high regulatory costs.
This mirrors work happening elsewhere, such as at the US Treasury and in European countries. Financial regulators in the UK, the Netherlands and Denmark have all released policy papers and updates on best practices and AI's impact on financial services.
The EU consultation aims to collect insights from a wide range of financial services stakeholders, including companies and consumer associations, with a particular emphasis on financial firms that develop, deploy or use AI systems.
The commission hopes to better assess market developments, identify potential risks and ensure effective implementation of the AI Act within the financial sector.
The focus will remain on the objectives of financial sector regulation and the AI Act, rather than broader policy goals such as competition policy, and firms have until September 13 to respond.
The consultation document states that “depending on the progress made, the Commission will publish a report on the findings and an analysis of the main trends and issues arising with the use of AI applications in financial services”.
What is included and how can payment service providers respond?
The consultation is structured to include multiple choice and open-ended questions, divided into three main sections.
The first, General Questions on AI Development, seeks to understand the overall landscape of AI development in financial services.
The second section is called Specific Use Cases in Finance and allows respondents to provide detailed input on particular applications of AI within the financial sector.
The third section, AI Act and Financial Sector, focuses on how the AI Act applies specifically to financial services.
The second section is most significant for payments firms as it includes questions specifically tailored to the payments and retail banking sector. For example, the seventh question asks firms to rank the benefits of AI, such as fraud detection, compliance support and task automation.
The ninth question asks respondents to score AI challenges and risks, including reputational risk and regulatory compliance, on a scale from 1–10.
The consultation also seeks to understand whether AI reduces or increases bias and discrimination, the impact of general-purpose AI on new possibilities or risks, and the reliance on external providers, in-house applications, or partial collaborations for AI development.
