This week’s regulation of artificial intelligence sees China, India and the global banking industry grappling with the need for comprehensive AI regulation as the technology’s influence grows. Experts emphasize the importance of balancing innovation with consumer protection, as financial institutions leverage AI to streamline compliance processes amid increasing regulatory pressure.
As artificial intelligence continues to reshape global industries, China is evolving its regulatory and legal landscape to address the technology’s unique challenges.
“China takes a distinct approach to issues related to AI, data and the law,” said Reed Smith attorney Cheryl Yu in a recent blog post. She and fellow attorney Barbara Li discussed compliance requirements for AI service providers and users in China.
Beijing-based Li highlighted emerging case law on copyright protection and liability of AI-generated content. “We are seeing a growing number of court decisions determining how intellectual property rights apply to AI creations,” she noted. The lawyers also provided insights on managing risks in China’s AI ecosystem. “Understanding the nuances of China’s regulatory framework is critical for companies operating in this field,” Yu said.
As China consolidates its position in AI development, recent legal trends point to a focus on ethical AI use and data protection. New regulations require AI service providers to conduct security assessments and obtain user consent for data collection. Courts are grappling with new issues, such as determining authorship of AI-generated works and liability for AI decision errors.
These developments suggest that China is balancing the promotion of innovation with consumer protection, creating a complex but potentially lucrative market for AI technologies, Li said.
AI will become an important tool for banks in regulatory compliance
As regulatory requirements for financial institutions continue to increase, banks are turning to artificial intelligence to streamline compliance processes and mitigate risk. Industry experts say AI tools can significantly improve efficiency and accuracy in regulatory testing and monitoring.
“The regulatory burden and costs to comply are only increasing, requiring banks to do more testing and monitoring with the same amount of resources,” wrote Leslie Watson-Stracener, managing director and regulatory compliance leader at Grant Thornton Advisors LLC, in a recent publication. blog post. She warned that increasing pressure on compliance teams “can lead to stress, burnout and human error.”
The application of AI in compliance extends to several regulations, including the Home Mortgage Disclosure Act, Truth in Lending Act, and Flood Disaster Protection Act. These tools can quickly review data and identify exceptions, freeing up staff for other priorities.
Wes Luckock, senior manager of advisory services at Grant Thornton, predicts a broader impact: “AI will play a role across the business cycle in an end-to-end way. It won’t just be a few tasks throughout the cycle – it will be the entire cycle.”
However, experts warn that human oversight remains crucial. Watson-Stracener advises: “Always make sure your board has oversight of your AI practices. And test your results.”
Indian speaker calls for AI regulation
Indian politician Om Birla recently called for global regulation of artificial intelligence and emerging technologies during an international parliamentary meeting.
In her address to the 149th Assembly of the Inter-Parliamentary Union (IPU), Birla emphasized the importance of international cooperation in science, technology and innovation for the greater good, The Hindu reported.
“The collective endeavor of parliaments around the world should be to ensure a fair and equitable distribution of the benefits of science, technology and innovation,” Birla said, highlighting the role of legislative bodies in shaping the technological progress underlined.
The Speaker advocated safeguarding citizens’ data privacy and ensuring responsible use of AI. He urged both the IPU and national parliaments to prioritize these issues, recognizing the far-reaching impact of technological progress.
Birla also showed India’s commitment to sustainable development, citing the significant increase in the country’s renewable energy capacity over the past decade. He pointed to initiatives such as the Green Hydrogen Mission and the International Solar Alliance as examples of India’s efforts to combat climate change.
