Financial Services Bill Amendments: Ethical AI

Today (10 March 2021) is day 6 of committee stage of the Financial Servces Bill in the House of Lords and I am putting forward several amendments dealing with various aspects of digital technology in financial services. Two amendments deal with Artificial Intelligence (AI) – the general principle of ensuring the ethical use of AI and proposals for an AI officer who would be responsible for the fair and unbiased use of AI in an organisation.

AI is already pervasive across so many aspects of our lives, including financial services. AI will be key in how the financial industry operates and delivers services. According to consulting firm Accenture, the contribution of AI and augmented technologies to the bottom line for financial services companies around the world is estimated at $140 billion in productivity gains and cost savings by 2025.

Contrast that with surveys which estimate that around 0.8% of global GDP disappears in fraud in financial services. AI has a real and real-time role here. So, potentially, plus, plus. Much more than fraud detection, it is clear that there will also be an increasing use of AI in the customer experience, Bots and Robochatterers, in the deal process, not least in terms of due diligence and, generally, in addressing the perennial problem of false positives.

In the introduction to our 2018 Lord’s select committee report on AI, we noted that the UK is in a strong position to be a world leader in the development of AI. This position, coupled with the wider adoption of AI, could deliver a major boost to the economy for years to come. The best way to do this is to put ethics at the centre of AI’s development and use. True then, true today. Our Chairman, Lord Clement-Jones said:

“The UK has a unique opportunity to shape AI positively for the public’s benefit and to lead the international community in AI’s ethical development, rather than passively accept its consequences.”

It is critical that everyone gets it, that AI is not without its risks, like all technologies, all tools, far from it. An ethical approach though will enable the public debate, the discussion and the best means of securing public engagement, trust and confidence in the uses and benefits of it. Our committee suggested a five point code which could get us towards this ethical use:

Artificial intelligence should be developed for the common good and benefit of humanity.
Artificial intelligence should operate on principles of intelligibility and fairness.
Artificial intelligence should not be used to diminish the data rights or privacy of individuals, families or communities.
All citizens should have the right to be educated to enable them to flourish mentally, emotionally and economically alongside artificial intelligence.
The autonomous power to hurt, destroy or deceive human beings should never be vested in artificial intelligence.

The precise wording of the amendment dealing with ethical AI is:

Insert the following new Clause—
“Ethical use of artificial intelligence by companies in the financial sector
(1) The Secretary of State must by regulations provide that companies operating in the financial services sector who make use of artificial intelligence must ensure its use is in line with guidance published by the Centre for Data Ethics and Innovation.
(2) Regulations under subsection (1) are subject to the affirmative procedure.”
Amendment 118, Committee Stage Day 6, Financial Services Bill, House of Lords, 10 March 2021

The intention of the other AI amendment is to explore the possibilities of an AI officer within financial institutions. If it is accepted that an anti-money laundering officer (AMLO) is necessary then I would suggest that an artificial intelligence officer (AIO) is at least as important.

Insert the following new Clause—
“Designated artificial intelligence officer
(1) The Secretary of State must by regulations made by statutory instrument provide that companies operating in the financial services sector who use artificial intelligence (“AI”) must have a designated AI officer.
(2) The AI officer under subsection (1) has responsibility for ensuring the—
(a) safe,
(b) fair,
(c) unbiased, and
(d) non-discriminatory, use of AI.
(3) The AI officer under subsection (1) also has responsibility to ensure that data used in any AI technology is unbiased.
Amendment 112, Committee Stage Day 6, Financial Services Bill, House of Lords, 10 March 2021

We know that so many data sets are biased. Numerous examples have horrifically brought this home to any doubters of this objective deficit. Consider just one; the US soap dispenser case, trained only on white hands, refusing, as a consequence, any soap to any hands which did not fit this learned material. Truly shocking, but it happened. Though AI can learn – and improve – it still can’t make judgment calls. Humans can take individual circumstances into account when making decisions, something that AI might never be able to do. We must, not only encourage ethical approaches to the auditing of datasets, but, also ensure greater diversity in the training and recruitment of AI specialists.

My hope in tabling these amendments is that these issues are fully explored and considered. AI is such a powerful tool, not least in financial services but it is all our responsibility to ensure that power is deployed for economic, social, psychological benefits and the overall public good.

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