Oxford Business Law Blog

Regulating AI in Finance: Putting the Human in the Loop

Globalization, digitization and technology are propelling Artificial Intelligence (AI) forward in finance at an ever increasing pace. Despite the fact that finance is where some of the greatest investment is taking place, little has been written about potential financial regulatory concerns. Traditional financial supervision, focused on external supervision, is generally unlikely to be highly effective in addressing the risks created by AI. The most effective path forward involves regulatory approaches which bring the human into the loop, enhancing internal governance and personal responsibility through external regulation. The most effective are AI-tailored manager responsibility frameworks, augmented in some cases by independent AI review committees.

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