Published by Jessica Weisman-Pitts
Posted on January 27, 2023
5 min readLast updated: February 2, 2026
By Alexei Zhukov, VP, Technology Solutions at EPAM Systems, Inc.
AI is increasingly engrained in everyday activities, from reading the news online and listening to music, to banking and driving to work. Its impact on our everyday lives is growing as algorithms minimize some or all decision-making. With worldwide business spending on AI set to reach $110 billion annually by 2024, it is undeniable that AI is an essential aspect of numerous industries. AI systems are now widely adopted as central to decisions regarding routing, purchasing, customer service and fraud detection across the banking, finance and insurance sectors. In fact, the financial services industry is regarded as the second biggest adopter behind retail.
With its ever-increasing impact on our lives, it is hardly surprising that governments and regulatory entities are becoming more concerned about AI’s widespread, evolving nature. In Europe, it is widely expected that the proposed EU AI Harmonisation legislation will be enacted in early 2024. The UK Financial Conduct Authority is also consulting on whether additional clarification of existing regulations may be helpful and how policy can best support safe and responsible AI adoption. In the United States, the Federal Trade Commission has emphasized that the agency already has enforcement powers with applicability to AI under three laws. The Algorithmic Accountability Act was also introduced in February 2022 in both Congress chambers.
Humanity has already borne witness to glimpses of what can go wrong with AI. In September 1983, the world averted a nuclear escalation thanks to Stanislav Petrov’s life-saving decision to wait for corroborating evidence, instead of triggering the chain of command, following an erroneous AI diagnostic that Russia was under attack. We have also seen how quickly a seemingly innocent chatbot like Twitter’s Tay can turn into a misogynist and racist conversationalist without the proper safeguard. Furthermore, with the increased intra-connectivity of AI services, realistic threat models must account for unpredictable systemic interference and sophisticated collusion that could take place and go completely undetected.
In parallel with the technological boom which has given AI much more power in recent years, the idea of how to do AI responsibly has also evolved and matured. The AI scientist, while having access to more powerful and complex algorithms, now also has access to a certain number of tools to decompose and dissect these complex algorithms. A certain number of frameworks and assessment tools are now available to ensure that the application of an AI solution is fair, accountable, appropriate, safe and governed.
And thus, in the absence of a strong negative reaction from consumers, and in a similar vein to what happened with the introduction of tighter Data Protection legislation a few years ago, it is very unlikely that AI will be stopped in its tracks. We could very well, however, witness the end of the Uncontrollable AI era and the birth of the Responsible AI era. And firms that will embrace this new era will be the AI winners of tomorrow, with a quicker return on AI investment and better AI innovation for their customers.
Five Steps Companies Can Take to Foster Responsible AI
As AI legislation continues to evolve and uncertainty remains, there are five proactive and practical steps companies can implement to promote responsible AI.
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think and learn. AI is used in various applications, including banking, to enhance decision-making processes.
Responsible AI refers to the ethical and accountable use of artificial intelligence technologies. It emphasizes fairness, transparency, and safety in AI systems to prevent biases and ensure compliance with regulations.
AI legislation encompasses laws and regulations governing the use of artificial intelligence technologies. These laws aim to ensure that AI is developed and used responsibly, protecting consumers and promoting ethical standards.
Fraud detection in banking involves identifying and preventing unauthorized transactions or activities. Banks use AI and machine learning algorithms to analyze patterns and detect anomalies that may indicate fraud.
Customer service automation refers to the use of technology, such as chatbots and AI, to handle customer inquiries and support. This improves efficiency and allows for 24/7 service availability.
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