On July 8, CFTC Commissioner Kristin Johnson remarked on the rapid integration of AI and machine learning technologies specific to the financial sector. To deter bad actors, the Commissioner noted how using AI to commit fraud or regulatory violations may warrant heightened civil monetary penalties. She emphasized AI’s transformative impact on compliance, market surveillance and regulatory enforcement. The Commissioner also noted how advances in AI could increase inclusion and customer experiences, democratize financial services through greater access, improve accuracy and efficiency, and potentially reduce transaction and compliance costs. She highlighted recent technological advances in computing, data storage and the digital economy and how they have accelerated AI and machine learning functions across finance; these systems could strengthen prudential oversight and equip regulators with new tools. The CFTC has observed firms using AI to prevent anti-money laundering efforts, detect surveillance and cyber threats, and employ supervisory technology to analyze large data sets and detect emerging risks.
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