Regulatory & Compliance | 01.27.26
FINRA Flags Rise of Agentic AI, Seeks Member Firms' Feedback
by: Leo Almazora
The Financial Industry Regulatory Authority (FINRA) is intensifying its focus on “agentic” AI, as broker-dealers and advisors expand its use beyond internal tasks. FINRA Executive Vice President and Chief Regulatory Operations Officer Greg Ruppert highlighted early applications, including conversational agents, software development, fraud monitoring and trading execution, while cautioning that autonomy and opacity pose compliance, governance and cyber risks. Issues include decision traceability, data exposure, bias, hallucinations and misaligned incentives. FINRA encourages firms to share approaches, emphasizing robust supervision, scope limits and audit trails as baseline safeguards. The initiative aims to inform future guidance.
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