Mapping generative AI regulation in finance and bridging regulatory gaps
Publication Type
Journal Article
Publication Date
2-2025
Abstract
Generative artificial intelligence (GenAI) is rapidly reshaping the financial services sector by introducing new avenues for innovation, efficiency, and profitability. GenAI systems, including models like “generative adversarial networks” (GANs) and “transformers”, can autonomously generate content such as synthetic data, trading strategies, and fraud detection insights, transforming traditional financial operations. However, these advancements come with new challenges, particularly in ensuring that GenAI is deployed ethically, securely, and in compliance with evolving regulatory frameworks. Current financial regulations, such as those governing anti-money laundering (AML), market integrity, financial consumer protection, among others, were originally designed for human-driven processes and do not fully address the complexities introduced by AI systems. While some jurisdictions, such as the E.U., Singapore, the U.S., and China, have launched AI regulatory initiatives, frameworks specifically tailored to the financial services industry are still a work in progress. This article seeks to provide an overview of the regulatory landscape while raising awareness of the gaps that financial institutions and regulators should address to bridge the gaps in the GenAI responsible adoption in the financial sector.
Keywords
artificial intelligence, generative AI, AI Regulation, AI Governance, Financial Regulation
Discipline
Artificial Intelligence and Robotics | Science and Technology Law
Research Areas
Innovation, Technology and the Law
Publication
Journal of Financial Transformation
First Page
104
Last Page
111
Publisher
CAPCO Institute
Citation
REMOLINA LEON, Nydia.
Mapping generative AI regulation in finance and bridging regulatory gaps. (2025). Journal of Financial Transformation. 104-111.
Available at: https://ink.library.smu.edu.sg/sol_research/4641
