Fed discusses AI risks with banks

In his speech at the event on “Cryptocurrencies and the Future of Global Finance” in Florida, USA, Waller warned that while artificial intelligence can bring new efficiencies to banking processes, it contains new risks.

Noting that more financial institutions are now using artificial intelligence to monitor fraud and insurance activity with their customer service apps, Waller said he has regular discussions with the banks the Fed oversees about managing risks related to artificial intelligence.

“TAKE CARE OF RISKS”

Waller also said that “smart contracts” whose results depend on preprogrammed inputs show promise in modernizing banking transactions, adding that smart contracts carry risks such as cybersecurity vulnerabilities and bugs. (AA)