The Bank of England is launching a new “AI Consortium” as it mulls future regulations – and you have one week left to get your application in.
The central bank described this as “a platform for public-private engagement” that will be chaired by Sarah Breeden, the Bank’s Deputy Governor for Financial Stability; applications close November 8.
The 30-strong Bank of England AI Consortium is set to be launched as Breeden flagged the sharp rise in generative AI use across the financial services sector – and raised concerns over “macro fragilities” resulting from the concentrated use of a limited number of foundation models.
In a speech published on October 31, that was given at a “KMA-BIS Joint Conference” on emerging technologies, Breeden said: “we don’t want to be left in the position of choosing between, on the one hand, letting a powerful new technology threaten financial stability, and on the other, preventing its use and losing out on growth and innovation - simply because we don’t have the policy frameworks to enable its safe adoption.”
She cited a recent (still unpublished) BoE survey of 120 financial services firms that showing that 75% are already using some form of AI in their operations, including all of the large UK and international banks, insurers and asset managers that responded – up from 53% in 2022.
AI for credit risk assessment: Use is growing
Of these respondents:
- 41% of firms are using AI to optimise internal processes
- 26% are using AI to enhance customer support
- 16% of respondents are using AI for credit risk assessment
- 11% are using it for algorithmic trading
She added: “To be clear, I don’t think that… we are yet at the point where we need to change our tech-agnostic microprudential approach or where macroprudential policy is needed. But the power and use of AI is growing fast, and we mustn’t be complacent. We know from past experience with technological innovation in other sectors of the economy that it’s hard retrospectively to address risks once usage reaches systemic scale.”
The bank is seeking up to 30 individuals from across industry, academia and beyond to join the Bank of England AI Consortium. You will need to commit to four meetings per year. There is no remuneration for the role.
Outside this activity, the BoE and partners are due to publish the finalised Critical Third Parties (CTP) Regime Rules by the end of 2024, with the enhanced operational resilience regime set to “bring some other parties within the scope of our oversight powers for the first time” – likely to include cloud providers.
