Two Republican senators have talked about a new rule from the Securities and Exchange Commission. This rule will likely change how AI can be used in banking.
When the rule was first proposed and written down in July, it said that financial advisors or advisory groups would have to “identify and eliminate all conflicts of interest that arise from their use of AI.” Along with that, it said they should put their customers ahead of their “bottom line.”
The head of the SEC, Gary Gensler, spoke out about the dangers of AI and how it would be bad to let AI “make wrong assumptions about investors and exercise a bias toward a firm’s own products.”
In answer to Gensler, more than 20 Republican lawmakers wrote him a letter asking the SEC to get rid of this rule. The group said that this rule would make it very hard for financial advisors and advisory businesses to use any new technology, not just AI.
Senators Ted Cruz and Bill Hagerty brought the Protecting Innovation in Investment Act to the SEC. This bill would stop the SEC from making the rule official.
“In the end, American consumers will pay for yet another attempt by the SEC to regulate financial markets too much.” Hagerty said, “The agency should show that it can safely manage its own technology before trying to micromanage and stop private companies from using new technologies.”
The disagreement between these two senators shows how hard it can be for the government to apply these kinds of rules to technology, such as AI. It will be hard to come up with laws and rules that don’t limit businesses but also keep things secret and get rid of any problems that might arise from new technology.
