The American Fintech Council (AFC), an industry association representing responsible fintech companies and innovative banks, has submitted a comment letter to the Department of the Treasury in response to its Request for Information on Uses, Opportunities, and Risks of Artificial Intelligence in the Financial Services Sector. In this letter, AFC recommends measures to develop a pragmatic regulatory framework for AI, aiming to increase clarity for industry participants and foster responsible adoption of AI technology in financial services.
"AI has the potential to drive a profound shift in the financial services landscape towards personalized services that better meet consumers’ unique needs – particularly those of underserved communities," said Phil Goldfeder, Chief Executive Officer of AFC. "A unified federal framework is necessary for setting clear rules of the road and unlocking AI’s staggering potential to create a more inclusive financial system."
Recognizing that AI is already used across various financial services companies, products, and services, AFC seeks clarity from Treasury under a "unified and cohesive" regulatory framework. This would preempt a patchwork of state laws and allow uses of AI that exceed states' regulatory jurisdictions. The current regulatory ecosystem presents challenges to widespread adoption of AI in financial services, limiting innovations that could improve customer access and experience while building a more resilient industry.
Additionally, AFC highlights the essential role of existing consumer protections and governance structures in safeguarding privacy and managing third-party risk. It urges Treasury to work with other regulators to review and modernize current regulations comprehensively.
"A unified federal approach would streamline regulatory requirements, providing clarity and consistency that would enable financial institutions to leverage AI technologies more effectively," wrote Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC.
AFC is dedicated to promoting a transparent, inclusive, and customer-centric financial system by supporting responsible innovation in financial services.