May
27
On May 9, the U.S. House Committee on Financial Services issued a press release announcing the formation of two task forces: one on financial technology, to be chaired by Congressman Stephen Lynch (D-MA), and the other on artificial intelligence, to be chaired by Congressman Bill Foster (D-IL).
Committee chair Maxine Waters (D-CA) said:
As new technologies emerge and the financial services industry puts those technologies to use, Congress must make sure that responsible innovation is encouraged, and that regulators and the law are adapting to the changing landscape to best protect consumers, investors and small businesses. The new task forces … will help Congress to stay on top of new developments in these areas so that we are well-positioned to make policy.
Finextra reports that the fintech task force …
… will look at domestic and international regulation … as well as the infrastructure and legal and regulatory framework for efficient payments. Other areas of interest … include fintech and lending, specifically the use of alternative data for loan underwriting, and the use of big data and its implications for privacy.
… while the AI task force will look into AI’s …
…applications in financial services and regulation, its use in digital identification and combating fraud, and how automation could impact jobs in financial services and the overall economy.
Agree or not on the need, government oversight is an inevitability. And if that’s a given, I’d prefer Congress stay “on top of new developments” rather than make rules from an uninformed perspective. My concern, of course, is that government isn’t terribly good at nuance. It has a long history of resorting to bludgeons in matters better suited to surgical lasers. Yet on the crypocurrency and blockchain front, Cointelegraph sounds a hopeful note:
Some noted crypto-friendly representatives such as Warren Davidson (R) and Tom Emmer (R) will be joining the newly-founded fintech task force … Davidson reintroduced the Token Taxonomy Act with fellow representative Darren Soto (D), with the intent of providing regulatory certainty and discluding cryptocurrencies from securities laws. Emmer proposed three pro-blockchain and crypto bills in 2018: the Resolution Supporting Digital Currencies and Blockchain Technology, the Blockchain Regulatory Certainty Act, and the Safe Harbor for Taxpayers with Forked Assets Act.
The action is timely.
AI is playing an increasingly large role in fintech. Last week, a number of news outlets carried a press release from tech company Globality, Inc. announcing that “HSBC, one of the world’s leading banking and financial services companies … is adopting Globality’s innovative AI-based Platform for sourcing and procurement of services.” As reported by Yahoo:
Finding the best service provider at the right price for every project is impossible to achieve with legacy systems that are mostly analog and are not continuously learning, capturing knowledge, or digitally sharing results and feedback. As a result, companies do not get maximum value from third-party suppliers.
However …
… with Globality’s AI-based Platform, HSBC users will be able to scope projects in hours rather than days, and intelligently match their unique requirements to the best suppliers around the world.
Et tu, Watson?
Watson has of late poked its (his?) nose under the financial services tent as well. Named for the company’s first CEO, Thomas J. Watson—the same who infamously said, “I think there is a world market for maybe five computers”—IBM’s signature AI has come a long way since besting Ken Jennings and Brad Ruttler on the TV quiz show “Jeopardy.” To wit, these days Watson is helping Regions Bank call center employees render faster, more relevant, better informed service. A press release from IBM explains that with Watson Assistant, Regions Bank employees …
… can use AI-powered search when faced with a question to provide quicker call resolutions and more consistent answers. Already, 700 professionals at the bank rely on Watson to complete customer problem resolution.
And Regions customers who call for more routine needs often have the honor of addressing Watson itself (himself?):
… many interact directly with Watson Assistant receiving rapid and consistent answers to their questions. They can get help on a variety of issues including updating personal information and navigating the Regions Bank website. Letting Watson take on the more routine questions allows service representatives to tackle the more intellectually challenging questions, spend more time engaging with customers and be better informed to resolve issues.
In time, Watson will be expected to take on more tasks at Regions, “… including analyzing customers’ tone to help determine when a customer should be transferred to a live agent.”
It’s probably wise to continually increase Watson’s responsibilities. We wouldn’t want something that “smart” to grow bored.
The use of AIs in financial services is growing at a fast pace. If Congress has trouble keeping up, it may sooner or later need help from its own AI.