Peter Kamminga’s Post

Banks and investment firms within the European Union are required to uphold boardroom responsibility and fulfill legal obligations to safeguard customers when utilizing artificial intelligence (AI), as stated by the bloc's securities watchdog in its inaugural commentary on AI. The European Securities and Markets Authority (ESMA) outlined guidelines detailing how financial institutions regulated across the 27-country bloc can integrate AI into daily operations while ensuring compliance with the EU's MiFID securities law. Click here for more info: https://lnkd.in/g_AyuXDY

The European Securities and Markets Authority (#ESMA) has issued a crucial directive to banks and investment firms across the #EU, emphasizing their full responsibility when deploying artificial intelligence (#AI) technologies. According to #ESMA, management must ensure robust oversight and compliance with the Markets in Financial Instruments Directive (MiFID). #AI tools, whether developed in-house or sourced from third parties, must be used in a manner that prioritizes client interests. This directive underscores the need for a thorough understanding and #governance of #AI applications to safeguard customer protection and maintain ethical standards. Read more here https://lnkd.in/dBZ_5REa #EU #Bank #AML #governance #CFT #Antimoneylaundering #privacy

The Future of AI in European Finance: Balancing Innovation with Client Protection. The European Securities and Markets Authority (ESMA) recently issued important guidance on how financial institutions in the EU can leverage Artificial Intelligence (AI) while upholding client best interests and complying with MiFID securities regulations. This is a timely development, as AI holds immense potential to transform investment strategies and client services within the financial sector. However, its use also necessitates careful consideration of potential risks and robust oversight mechanisms. Here are the key takeaways for European financial institutions: 🔹️Ultimate Responsibility Lies with Management: Regardless of whether decisions are made by humans or AI-powered tools, the final responsibility rests with the firm's management body. 🔹️Client Best Interest at the Forefront: ESMA emphasizes the unwavering commitment to acting in clients' best interests, irrespective of the technology employed. 🔹️Third-Party AI Scrutiny: The guidance applies not just to internally developed or adopted AI tools, but also extends to third-party technologies like ChatGPT and Google Bard, even if their use isn't explicitly endorsed by senior management. 🔹️Understanding and Oversight are Crucial: Management must possess a clear understanding of how AI technologies are implemented within their organization and ensure proper oversight of these systems. This initiative by ESMA comes ahead of the EU's landmark AI regulations coming into effect next month, which are poised to set a global standard for responsible AI development and deployment. As the G7 nations also work towards establishing guardrails for this rapidly evolving technology, the European financial sector has a unique opportunity to become a leader in harnessing AI's potential while prioritizing customer protection. If u liked it , u can subscribe to my newsletter Insight_vault https://lnkd.in/d4eNRyjB for weekly updates on AI , TECH. #AI #finance #regulation #ESMA #MiFID #financialtechnology #clientexperience

Last Thursday (30/5/2024), the European Securities and Markets Authority (ESMA) released a pivotal Statement providing guidance for firms integrating Artificial Intelligence (AI) into investment services aimed at retail clients. As AI reshapes the financial landscape, ESMA emphasizes adherence to MiFID II, ensuring organizational conduct and client-centric business practices remain in focus. The guidance addresses the challenges and risks associated with AI, including algorithmic biases, data quality, privacy issues, and the transparency of AI-driven decisions. Firms are urged to manage these risks while harnessing AI for customer support, fraud detection, risk management, and more, ensuring they act in the best interests of their clients. Follow Global Regulatory Insights to stay updated on how AI is transforming the investment sector and what it means for businesses and consumers. #ArtificialIntelligence #InvestmentServices #FinancialRegulation #ESMA #MiFIDII #DigitalFinance #GRI #InvestorProtection

This is why it is essential to have documented procedures, training, and oversight for your firm's use of #AI. The new rules the European Securities and Markets Authority (ESMA) set apply to banks and #InvestmentFirms within the #EuropeanUnion. These rules focus on firms maintaining full responsibility and legal obligations to protect customers using AI. This includes ensuring appropriate oversight and risk management to mitigate AI-related risks such as lack of explainability, bias, and operational risks. While the UK has not implemented exact matching rules (yet), regulated firms are expected to adhere to specific guidelines. The Financial Conduct Authority (#FCA) requires firms to ensure that AI systems treat customers fairly and not mislead them, aligning with the FCA’s broader principles of ensuring transparency and fairness in financial services. If your firm is unsure about its AI governance or wants to stay updated with the latest changes, the Impact IT team can help. https://lnkd.in/giEpKBNk

Our latest blog on The TRADE News about the growing regulatory risk related to #AI, ahead of our upcoming Data Minds webinar on all things risk and data! https://lnkd.in/eV-Fmh8a #fintech #regulation

😮 It's astonishing that the majority of listed companies are unaware of the nature of their electronic data ! 🤖 In an era dominated by digital advancements and AI, such a revelation appears incredulous. However, after conversing with numerous prominent listed companies across France and Europe, it's become evident that this is indeed the case. This lack of awareness often translates into the publication of data that proves difficult to comprehend. To illustrate, let's examine a comparison using genuine data from various issuers (anonymized): on the left, easily understandable data; on the right, the reality of what 60% of issuers are reporting. 📈 Comparison and benchmarking lie at the heart of every financial professions. It's a shame to miss out on this chance, especially when it's actually quite simple and accessible for all issuers. #ESEF #AI #XBRL #FinancialReporting #Data #IFRS Corporatings European Securities and Markets Authority (ESMA)XBRL Europe

White paper: Now a twice-yearly update in the form of a handy, easy-to-read publication, this deep dive into regulations impacting the post-trade landscape from Deutsche Bank’s Boon-Hiong Chan and Britta Woernle provides an update on accelerated settlement, digital assets, artificial intelligence, and client asset protection. This white paper, our first regulatory update of 2024, summarises key global and regional regulatory developments, and how they are shaping the securities services industry. Essential reading for all those in the custody industry. Click here to read more: https://lnkd.in/eYHKdDiE   #SecuritiesServices #PostTrade #Regulatory #DigitalAssets #Settlement #AI

😮 It's astonishing that the majority of listed companies are unaware of the nature of their electronic data ! 🤖 In an era dominated by digital advancements and AI, such a revelation appears incredulous. However, after conversing with numerous prominent listed companies across France and Europe, it's become evident that this is indeed the case. This lack of awareness often translates into the publication of data that proves difficult to comprehend. To illustrate, let's examine a comparison using genuine data from various issuers (anonymized): on the left, easily understandable data; on the right, the reality of what 60% of issuers are reporting. 📈 Comparison and benchmarking lie at the heart of every financial professions. It's a shame to miss out on this chance, especially when it's actually quite simple and accessible for all issuers. #ESEF #AI #XBRL #FinancialReporting #Data #IFRS Corporatings European Securities and Markets Authority (ESMA)XBRL Europe

😮 It's astonishing that the majority of listed companies are unaware of the nature of their electronic data ! 🤖 In an era dominated by digital advancements and AI, such a revelation appears incredulous. However, after conversing with numerous prominent listed companies across France and Europe, it's become evident that this is indeed the case. This lack of awareness often translates into the publication of data that proves difficult to comprehend. To illustrate, let's examine a comparison using genuine data from various issuers (anonymized): on the left, easily understandable data; on the right, the reality of what 60% of issuers are reporting. 📈 Comparison and benchmarking lie at the heart of every financial professions. It's a shame to miss out on this chance, especially when it's actually quite simple and accessible for all issuers. #ESEF #AI #XBRL #FinancialReporting #Data #IFRS Corporatings European Securities and Markets Authority (ESMA)XBRL Europe