Will AI Automate Tasks in the European Central Bank Despite Concerns Regarding Transparency and Safety?

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The European Central Bank (ECB) is trying out employing off-the-shelf artificial intelligence (AI) solutions to automate routine activities. Before contemplating its usage in crucial financial procedures, the “infinity team” is investigating how to produce text, graphics, and computer software.

Words From European Central Bank’s Chief Services Officer 

Myriam Moufakkir, the Chief Services Officer of the ECB, has started a project to apply AI for a specific set of use cases. Drafting briefings, summarizing meetings, writing software code, editing the language used in official communications, and writing code are some examples.

The CSO stressed the bank’s circumspect attitude in light of the threats to openness and the law. It can be challenging to determine who is responsible for a detrimental answer since humans are unable to constantly grasp how AI generates its solutions. 

Moufakkir also emphasized the importance of ensuring transparency and accountability in the use of AI within the ECB. This includes establishing clear guidelines and protocols to monitor and evaluate the decisions made by AI systems, as well as regularly assessing their impact on the bank’s operations and stakeholders. Additionally, he highlighted the need for ongoing research and collaboration with experts in AI ethics to address any potential biases or unintended consequences that may arise from using AI in these specific use cases. 

What The Governor of the US Federal Reserve Has to Say?

On the contrary, Lisa Cook, governor of the US Federal Reserve, warned this week that artificial intelligence is useless if its decision-making process is opaque. According to a recent investigation, the advantages of AI in banking become less obvious when we define it badly. 

Real Life Example 

For example, in the context of AI being used for credit scoring in banking, if the algorithm is not properly defined and transparent, it could lead to biased decisions that discriminate against certain individuals or groups. This could result in unequal access to financial services and perpetuate existing inequalities. Ongoing research and collaboration with experts in AI ethics are crucial to ensure that the decision-making process of AI systems is fair and transparent, thus preventing any unintended consequences or biases.

What Can be Next? 

The Federal Reserve, the Bank of England, and the Monetary Authority of Singapore are all investigating AI, as is the ECB. While the Bank of England prepares to launch its own system for speedy interbank settlements, the Fed is operating its FedNow system for immediate settlements, which many say prefigures a central bank digital currency (CBDC).