President Trump signed an executive order on AI Thursday, called “Removing Barriers to American Leadership in Artificial Intelligence,” that aims to make the United States a global leader in AI by eliminating policies perceived as hindrances to innovation. This should mean fewer regulatory concerns for banks as they test and deploy advanced forms of AI.
Earlier this week, the president
The new order directs a group of presidential advisors to develop an artificial intelligence action plan within 180 days that would promote economic competitiveness through AI advancements. It instructs them to review existing AI-related policies and directives and recommend the suspension, revision or rescission of any actions that conflict with the new policy direction of rapid AI innovation unhampered by unnecessary regulatory constraints.
“We’re announcing administration policy to make America the world capital in artificial intelligence and to dominate and to lead the world in AI,” said
As a result of the new directive, banks may see fewer regulatory hurdles to using AI systems in areas like algorithmic trading, fraud detection and cybersecurity. This could, in theory, help them bring AI-based products and services more quickly to market.
However, the wheels of change do not move quickly in regulatory agencies, and banks may continue to face questions about new technology from their examiners. Also, the new executive order does not rescind existing banking laws on fair lending, unsafe practices and the like, and it doesn’t unwind state laws on AI, data privacy and cybersecurity. Nor does it preclude customers from suing when AI misfires. So banks will still have reasons to be cautious in their approach to AI, especially in applications that affect consumers.
Business groups, unsurprisingly, expressed support for the new order. “President Trump’s executive orders this week on artificial intelligence and digital financial technologies reflect what we’ve said for years: that America must lead the world on these and other vital emerging technologies,” said Gary Shapiro, CEO and vice chair of the Consumer Technology Association, in a statement.
Others expressed dismay at the loss of protections in Biden’s executive order on AI.
Biden’s order “was a watershed attempt to govern technology in the U.S. — to regulate new technologies for the public good, protect Americans against violations of their rights and liberties when AI is in use, and build the governmental muscle to ensure that AI serves all Americans, rather than just the privileged few,” the Data and Society Research Institute said in a statement. “The Trump administration removes those protections. Now, Americans are more likely to face AI-enabled discrimination at their jobs, in the housing and financial markets, and in the criminal legal system. Federal agencies may now use AI to support critical decision-making without any safeguards or checks to protect our rights and safety.”