United Kingdom: Opened consultation of Bank of England and FCA on AI and Machine Learning in Financial Services

On 11 October 2022, the Financial Conduct Authority (FCA) and the Bank of England opened a consultation on the use and regulation of artificial intelligence (AI) and machine learning (ML) in UK financial services. Through a Discussion Paper (DP), both institutions explore the best approach to defining and scoping the characteristics of AI in order to provide guidance and clarify the legal requirements. The DP includes the data protection regulations that providers have to comply with if they use risk data or personal data. In addition, they also seek to identify the benefits and risks of AI to identify the areas where supervisory authorities should prioritise action. The DP also analyses whether the current legal requirements and guidances are addressing the possible risks and harms associated with AI and outlines additional regulations that could enable the safe and responsible adoption of AI. The stakeholders are invited to submit their comments until 10 February 2023.