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Regulation of AI needs to be Ambitious not Ambiguous

Category: Energy & Environment,Finance

London, UK - April, 2019. Can regulation promote a new gold standard rather than shackle innovation? Photocredit: Getty

Getty

On 8th April 2019, Transport for London (TfL), the organisation tasked with managing the transportation infrastructure around the UK’s capital introduced the Ultra Low Emission Zone (ULEZ) which in essence meant that drivers of diesel and petrol cars over 5 or 14 years’ in age respectively would need to pay a daily charge £12.50 to enter central London.

The plan is to extend the ULEZ to cover the whole zone between the North and South Circular roads by 2021 with the intention of encouraging innovation in vehicle emission reduction technology, promoting greater uptake of electric cars, with the effect of having a positive impact on the quality of air that Londoners breathe.

On 26th March 2019, the European Transport Safety Council (ETSC) announced its support of a provisional deal that would require new vehicles sold in Europe to have standard safety features fitted as standard such as Intelligent Speed Assistance (ISA) which would limit the speed of a vehicle to the speed limit of the area that it was driving in.

While the deal needs to be still ratified by the European Parliament and won’t come into force until at least 2022, the expectation is that the technology could prevent 25,000 deaths within 15 years of coming into force.

What do both of these stories have in common?

While aside from the fact that both are made possible through AI technology, they are both examples of proactive regulation that is designed to spur industry on to innovate in order to achieve a public benefit.

I spend much of my time looking at how the technology emerging from the AI ecosystem can help organisations better serve their clients.

It’s the early stages of what promises to become a major component of their future technology stacks, and something which is perhaps hyped and feared in equal measure.

Within the Financial Services industry, we are all anxiously awaiting what compliance requirements will come from the regulators such as the UK’s Financial Conduct Authority (FCA). I participate in a number of working groups where counterparts from firms come together to discuss what level of regulation might be appropriate.

These conversations mostly tend to centre around the need to finely balance the control of unexpected risks against the opportunity offered from innovation. This is because those in my position tend to see regulation as being the shackles to constrain our activity as opposed to an opportunity to advance the outcome for customers.

Perhaps a lesson could be learned by us from looking at the various transport regulators?

If we start from a public policy perspective, how could we innovate in order to say, eliminate financial crime over the next decade much as TfL seeks to eliminate car pollution and ETSC to eliminate road deaths?

Could we as an industry be ambitious enough, for example, to ask for regulation to mandate the use of AI technology in Anti-Money Laundering processes so as to minimise the chance of bad actors infiltrating the Financial Services industry?

I believe we can, and should be seeing regulation not as the shackles to constrain innovation but as the gold standard toward which to strive.

AI technology makes many things possible that would be impractical before it’s advent - such as monitoring the entry and exit of vehicles into parts of our road network and detecting the speed restrictions in place.

These are but two examples - what others can we discover?

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London, UK - April, 2019. Can regulation promote a new gold standard rather than shackle innovation? Photocredit: Getty

Getty

On 8th April 2019, Transport for London (TfL), the organisation tasked with managing the transportation infrastructure around the UK’s capital introduced the Ultra Low Emission Zone (ULEZ) which in essence meant that drivers of diesel and petrol cars over 5 or 14 years’ in age respectively would need to pay a daily charge £12.50 to enter central London.

The plan is to extend the ULEZ to cover the whole zone between the North and South Circular roads by 2021 with the intention of encouraging innovation in vehicle emission reduction technology, promoting greater uptake of electric cars, with the effect of having a positive impact on the quality of air that Londoners breathe.

On 26th March 2019, the European Transport Safety Council (ETSC) announced its support of a provisional deal that would require new vehicles sold in Europe to have standard safety features fitted as standard such as Intelligent Speed Assistance (ISA) which would limit the speed of a vehicle to the speed limit of the area that it was driving in.

While the deal needs to be still ratified by the European Parliament and won’t come into force until at least 2022, the expectation is that the technology could prevent 25,000 deaths within 15 years of coming into force.

What do both of these stories have in common?

While aside from the fact that both are made possible through AI technology, they are both examples of proactive regulation that is designed to spur industry on to innovate in order to achieve a public benefit.

I spend much of my time looking at how the technology emerging from the AI ecosystem can help organisations better serve their clients.

It’s the early stages of what promises to become a major component of their future technology stacks, and something which is perhaps hyped and feared in equal measure.

Within the Financial Services industry, we are all anxiously awaiting what compliance requirements will come from the regulators such as the UK’s Financial Conduct Authority (FCA). I participate in a number of working groups where counterparts from firms come together to discuss what level of regulation might be appropriate.

These conversations mostly tend to centre around the need to finely balance the control of unexpected risks against the opportunity offered from innovation. This is because those in my position tend to see regulation as being the shackles to constrain our activity as opposed to an opportunity to advance the outcome for customers.

Perhaps a lesson could be learned by us from looking at the various transport regulators?

If we start from a public policy perspective, how could we innovate in order to say, eliminate financial crime over the next decade much as TfL seeks to eliminate car pollution and ETSC to eliminate road deaths?

Could we as an industry be ambitious enough, for example, to ask for regulation to mandate the use of AI technology in Anti-Money Laundering processes so as to minimise the chance of bad actors infiltrating the Financial Services industry?

I believe we can, and should be seeing regulation not as the shackles to constrain innovation but as the gold standard toward which to strive.

AI technology makes many things possible that would be impractical before it’s advent - such as monitoring the entry and exit of vehicles into parts of our road network and detecting the speed restrictions in place.

These are but two examples - what others can we discover?


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