EU watchdog urges banks to prioritize clients in AI usage

The European Securities and Markets Authority said that banks and investment firms must have “unwavering commitment” to clients' best interest when it comes to the usage artificial intelligence .a public statement that outlines the ways in which financial services companies within the European Union can use AI in their operations.

The ESMA said that while AI has the potential to “transform” the landscape of retail investment services in terms of efficiency and innovation, its impact on the behaviors of financial institutions and retail investor protection it said is likely to be “significant.” It continued to say that as AI is employed in investment services, it will require these firms to have an “unwavering commitment” to acting in the best interests of their clients, irrespective of the AI tools in use.This applies to AI tools that are both uniquely developed or adopted by the financial institutions themselves but also if they choose to utilize third-party AI services. This would include generative AI chatbots like OpenAI’s ChatGPT, and Google’s Gemini.

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