Artificial intelligence has emerged as a key focus for US financial regulators, with Treasury Secretary Scott Bessent highlighting its potential benefits and risks. Speaking before the House Financial Services Committee, Bessent emphasized that AI is now among the top priorities for safeguarding the financial system, alongside Treasury markets, cybersecurity, and regulatory modernization.
Regulators are actively collaborating with both public and private entities to ensure responsible AI usage to enhance financial stability. The rapid adoption of AI in banks and financial markets for functions like risk management and compliance has raised concerns about the potential amplification of shocks during periods of instability.
Acknowledging the importance of monitoring AI risks, Bessent noted a shift towards targeted vulnerability assessments rather than broad warnings in regulatory approaches. While Democratic lawmakers expressed worries about AI-driven decisions introducing bias and discrimination, Bessent highlighted the need for global cooperation to address AI risks effectively.
Republican lawmakers largely supported the administration’s stance on AI regulation, emphasizing the role of innovation in fraud detection, customer service enhancement, and compliance strengthening. Bessent also underscored the significance of mitigating concentration risks associated with heavy reliance on specific AI vendors or systems, particularly in the face of cyber threats targeting financial institutions.
