The Financial Conduct Authority’s (FCA) chief data, information and intelligence officer has said that the financial industry is at a “pivotal moment” in deciding how to approach AI.

At the City and Financial Global AI Regulation Summit on Friday, Jessica Rusu told firms that that the industry is at a point where it has options on where to take AI and could still “influence the outcome” of where the technology sits in the sector.

But she warned firms that if the industry focuses too narrowly on AI alone, it could miss out on the opportunity to “connect the dots with the broader issues related to digital infrastructure”.

She highlighted a growing reliance on the cloud and other third-party tech providers, the important role of good quality data in the adoption of AI, and how these considerations impact consumer safety as issues that need to be brought to the fore.

“Safe and secure AI is dependent on well-functioning digital infrastructure, one that protects the operational resilience and cyber-security of UK financial services,” said the chief data officer.

Rusu explained that while the regulator is “technology-neutral and pro-innovation”, it is very clear when it comes to the impact of these technologies, telling firms that it expects them to be “fully compliant” with existing frameworks, including the recently launched Consumer Duty and the Senior Managers & Certification Regime (SM&CR).

She also warned of a rise in AI scams, including audio deepfake technology, vishing scam calls, and biometric theft, which pose a risk to both consumers and financial services providers.

Additionally Rusu said that when considering the role of data in AI, it must also consider the question of ethical data usage.

“We know AI has the potential to transform financial services,” the FCA executive told the Summit. ”But we know that this must be balanced against the potential risks also, with responsible adoption being paramount, and the need for firms to adhere to the existing regulations in order for beneficial innovations to materialise.”

She continued: “It may be that the proverbial coin that is AI is still in the air, with the outcome hanging in the balance. We can, however, determine the fate of this digital coin toss through collaboration, our commitment to beneficial innovation and ensuring the right guardrails are in place.”

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