06.27.24
Firms’ AI Adoption Poses Compliance Challenges: FINRA
by: James Langton
Financial Industry Regulatory Authority (FINRA) reminded brokerage firms of their compliance obligations when deploying generative artificial intelligence (AI) technologies. In a notice, FINRA said that while the technologies have the potential to enhance firms’ products and services for investors and improve operational efficiency, firms must be aware of the potential implications for their regulatory obligations. “While these potential uses are promising, the development of gen AI also has been marked by concerns about accuracy, privacy, bias, intellectual property and possible exploitation by threat actors, among others,” the notice stated. In light of these concerns, FINRA said that firms “should evaluate gen AI tools prior to deploying them and ensure that the member firm can continue to comply with existing FINRA rules applicable to the business use of those tools.”
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