U.S. Treasury Secretary Janet Yellen on Thursday warned bank officials and tech executives about the risks associated with the use of artificial intelligence (AI) in finance.
"Specific vulnerabilities may arise from the complexity and opacity of AI models; inadequate risk management frameworks to account for AI risks; and interconnections that emerge as many market participants rely on the same data and models," she said during her speech at the Financial Stability Oversight Council Conference on Artificial Intelligence and Financial Stability.
"Concentration among vendors developing models, providing data, and providing cloud services may also introduce risks, which could amplify existing third-party service provider risks," she said. "And insufficient or faulty data could also perpetuate or introduce new biases in financial decision making."
Yellen's comments came after the Treasury Department earlier issued a request for public information on uses, opportunities and risks of AI in the financial services sector.
"The tremendous opportunities and significant risks associated with the use of AI by financial companies have moved this issue toward the top of Treasury's and the Financial Stability Oversight Council's agendas," said Yellen.
