The Proposed AI Civil Rights Act: Good or Bad for Banks?
Yesterday, Senator Edward J. Markey of Massachusetts introduced the AI Civil Rights Act. The proposed act, co-sponsored by Senator Mazie Hirono of Hawaii, aims to place guardrails on how companies use algorithms for consequential decisions, prevent bias, and "renew Americans’ faith in the accuracy and fairness of complex algorithms."
"I am introducing the Artificial Intelligence Civil Rights Act to ensure that the AI Age does not replicate and supercharge the bias and discrimination already prevalent in society today," said Senator Markey.
This proposed legislation would require banks and fintechs to test their algorithms for bias and offer consumers the option to have decisions made by humans instead of AI. This could specifically impact loan underwriting and hiring, two manual processes where bias may lead to large consequences.
While guarding AI against bias is extremely important, it is also quite difficult, as much of AI's biases are the result of human biases. Additionally, requiring firms to guard their AI against bias to remain compliant could prove to be expensive, as it would result in additional costs from algorithm testing, validation, and adjustment.
There is certainly a concern that the increased costs for AI implementation could slow development in the area, and ultimately place the U.S. behind in the global AI arms race. However, if regulation isn't in place to protect consumers from the consequences of AI, what will?
I'm Julie Muhn, contemplating one of AI's biggest conundrums while bringing you today's Finovate Weekly newsletter.
All about Agentic AI
While I'm on the topic of AI, have you heard about Agentic AI? Also known as autonomous AI, Agentic AI refers to AI that can make its own decisions, form a plan, act on its own, and learn from its mistakes to achieve specified goals.
In my piece earlier this week, I took a look at the possibilities Agentic AI may be able to unlock for banks and fintechs, as well as how organizations can begin preparing themselves to adopt the enabling technology when it becomes widely available.
Weekly News
PNC and Plaid repair relationship to facilitate open banking.
FICO and Jersey Telecom team up to fight authorized push payment fraud.
Best of Show winner Illuma Labs raises $9 million in Series A funding.
Pause Button: Autumnal Equinox
Recommended by LinkedIn
My family and I went on our final backpacking trip of the season this weekend, which can mean only one thing: summer is officially over. Sunday was the first day of fall, also known as the autumnal equinox. But what does that mean?
According to Britannica.com, the autumnal equinox marks one of two moments in the year when the sun sits exactly above the equator. It also marks one of two days in the year when day and night are of equal length.
We'll have around three months to enjoy fall before the winter solstice takes over on December 21, and we get to experience the shortest day of the year.
Catch Up on Conversations You Missed
Miss any episodes of the Finovate Podcast while you were out this summer? Finovate's David Penn has you covered. His latest update highlights the past six episodes, including:
Episode 228: with John Driscoll of Naked Development
Episode 227 with Colby Mangers and Christine Martin of EverBank
Episode 226 with Kelly Fryer of Fintech Sandbox
Episode 224 with Author Rita Martins
Episode 223 with Alex Harris of Fiat Ventures
Header photo by cottonbro studio
Fall photo by Federica Galli on Unsplash
Conversation photo by Miguel Á. Padriñán