What’s in the black box? Rise of artificial intelligence in banking presents challenge for OSFI

  • “A federal regulator is signalling it could tighten up rules around the use of artificial intelligence by banks, a practice the watchdog suggests could pose risks to lenders as decisions made by the “black box” technology grow trickier to explain. 
  • ‘The behaviour of a black box system is observed only from its inputs and outputs,’ Sarfati wrote. ‘AI models may be technically complex and not transparent, so financial institutions must find solutions to interpret AI models into their business context.'”


An AI regulation strategy that could really work

  • “A regulatory market is a new solution to the problem of the limited capacity of traditional regulatory agencies, invented for the nation-state manufacturing age, to keep up with the global digital age.
  • The answer is for governments to shift their oversight to regulating the regulators. A private regulator would require a license to compete, and could only get and maintain that license if it continues to demonstrate it is achieving the required goals.”


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Fintech startups to make a bigger move in 2020, experts suggest

  • “Nearly 60 upstarts focusing on financial services — from Stripe Inc. to Chime Inc. to Plaid Inc. — have garnered valuations of more than $1 billion in recent years, according to CB Insights.
  • Alyson Clarke, principal analyst, Forrester: “Regulators are going to start taking a closer look and scrutinizing artificial intelligence.”


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Fintech investment to surge in 2020

“The report, Ecosystm Predicts: The Top 5 Fintech Trends for 2020, identifies five key trends that will shape the Fintech market during the next 12 months. It highlights the areas of digital banking, digital payments and Insuretech as the domains where exponential growth will take place.

The top five Fintech trends in 2020 will be: 

One for all and all for one

The year of the banks

Asia will see massive growth

The rise of Artificial Intelligence

Regtech will take centre stage”