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CFTC Commissioner Advocates For Transparent and Responsible AI

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Written by
Ciaran Lyons

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Edited by
Kyle Baird

16 November 2023 23:01 UTC
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  • CFTC Commissioner recognizes AI's vast potential in financial markets but underscores the need for ethical considerations.
  • Romero highlights the dual nature of AI in a keynote, emphasizing breakthroughs in healthcare and fraud detection.
  • SEC Chair Gensler cautions financial advisors about AI use, expressing concerns about conflicts of interest.
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The Commodity Futures Trading Commission (CFTC) Commissioner, Christy Goldsmith Romero, recognizes the significant potential of artificial intelligence (AI) to benefit financial markets but acknowledges the associated risks.

“In terms of protecting financial stability, particularly where it comes to AI models, there can be great promise and great risk,” Romero stated.

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CFTC Chief Urges Evaluation of Positive and Negative AI Aspects

Romero recently delivered a keynote at the Consumer Federation of America’s Financial Services Conference.

During the speech, Romero outlined that while AI has benefits, it also comes with risks that must be addressed to enjoy the benefits:

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Artificial intelligence is a consequential technology that could aid in breakthroughs in areas like healthcare, mitigating climate change, cybersecurity, fraud detection, and more. However, we have to manage risks so that we can receive these promises.”

Generative AI work time distribution by industry. Source: World Economic Forum
Generative AI work time distribution by industry. Source: World Economic Forum

Romero expressed her commitment to advocating for responsible AI.

Furthermore, she focused on maintaining fairness for all stakeholders through a transparent approach that can undergo regular audits and reviews. Romero added:

“It means ensuring that AI algorithms and outcomes are transparent, explainable, and auditable.”

Learn more: How To Use Bing Chat: A Guide to Microsoft’s AI Chatbot

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SEC Chairman’s Recent Alert on AI Risks in Financial Markets

This follows the Chairman of the United States Securities and Exchange Commission (SEC), Gary Gensler, warning financial advisors about the use of AI. 

Gensler expresses concern, particularly regarding the potential issues posed by AI’s predictive analytics tools. Furthermore, if they compromise the interests of customers:

“If a firm’s optimization function takes the interest of the firm into consideration as well as the interest of the investor, this can lead to conflicts of interest.”

Learn more: The 6 Hottest Artificial Intelligence (AI) Jobs in 2023

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