Use of AI in finance likely to trigger rise in fraud, says UK watchdog

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Applying artificial intelligence (AI) to financial services must go hand-in-hand with better fraud prevention and resilience to hacking and outages, Britain's Financial Conduct Authority (FCA) was expected to say on Wednesday.

Nikhil Rathi, chief executive of the FCA, said in remarks made available to the media in advance of a speech, that he was already seeing AI-based business models requesting authorisation.

"This means that as AI is further adopted, the investment in fraud prevention and operational and cyber resilience will have to accelerate simultaneously," Rathi will say. The watchdog has already observed how volatility during the trading day has doubled and amplified compared to during the 2008 global financial crisis.

 

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