Publication Type
Journal Article
Version
publishedVersion
Publication Date
3-2024
Abstract
Generative Artificial Intelligence captured the attention of academics, policymakers, the private sector, and some regulators in 2022 after the launch of ChatGPT and its widespread adoption worldwide. Then, during the World Economic Forum session in 2023, Microsoft Chairman and Chief Executive Officer Satya Nadella said that the ‘golden age’ of AI is underway and generative AI is set to play a big role in it. Accordingly, Microsoft has invested billions of dollars into OpenAI, the company behind the launch of ChatGPT. Additionally, Google and Meta have also created their own generative AI models. Given the multiplicity of potential use cases of generative AI models, the tech industry is not the only one interested in this development. Many industries were caught in the hype of generative AI, including the financial sector. Indeed, financial institutions worldwide are deploying generative AI and are starting with internal uses. However, along with that comes potential pitfalls and challenges. This paper argues that addressing the risks and challenges of generative AI requires a context and sector-specific debate. The challenges of using AI highly depend on the context in which the models are implemented and used. For example, generating content to provide financial advice has different implications for society than generating the image of a turtle. Hence, in the current debate about AI governance, and specifically in the generative AI space, it is important to analyse the risks of generative AI in finance. This paper is a first attempt to map the ethical and legal risks of generative AI in the financial sector given that previous scholarship and most policy discussions so far have focused on the risks of predictive AI in the financial sector. Based on this analysis and following a functional approach, the paper also proposes an avenue to deal with the risks created by generative AI in finance.
Keywords
generative AI, financial sector, AI governance, artificial intelligence, predictive AI, finance, AI regulation, financial regulation
Discipline
Artificial Intelligence and Robotics | Banking and Finance Law | Science and Technology Law
Research Areas
Corporate, Finance and Securities Law
Publication
Law, Ethics and Technology
Volume
1
Issue
1
First Page
1
Last Page
18
ISSN
2959-3077
Identifier
10.55092/let20240002
Citation
REMOLINA LEON, Nydia.
Generative AI in finance: Risks and potential solutions. (2024). Law, Ethics and Technology. 1, (1), 1-18.
Available at: https://ink.library.smu.edu.sg/sol_research/4612
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.55092/let20240002
Included in
Artificial Intelligence and Robotics Commons, Banking and Finance Law Commons, Science and Technology Law Commons
