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THEFINTECHVIEW

ISSUE #28

At the risk of adding to an already crowded debate, in which the world and its dog and Elon Musk hold a view, how have we come so far in the development of AI and yet made so little progress on deciding how/if to regulate it in some key jurisdictions – notably the UK and US?

OpenAI’s ChatGPT made history in January by becoming the fastest-growing consumer app, accruing 100 million daily active users in just 40 days – it took TikTok nine months to achieve such popularity.

The unprecedented speed of adoption, and the step change that generative AI presents in the way we interact with machines, has prompted a host of concerned commentary, government hearings and tech bosses themselves to call for closer scrutiny and control of the technology. And yet civil society groups, academics and developers have all been highlighting concerns for years about potential problems with large language models like these.

Not everyone has been sleepwalking into a regulatory and moral mess. The EU is in the process of introducing legislation that, once approved, will be

2023 the world’s first on AI. Biometric surveillance, emotion recognition and predictive policing AI are set to be outlawed and there will be tailor-made regimes for general-purpose AI and foundation models like GPT, with regulatory categories for low, limited, high and unacceptable risk. The rules also allow for complaints to be made about AI. Welcomed by civil society groups, the rules go for a vote before the whole parliament this month.

AI is a thread that runs through this issue – sustainability, open banking, regulation, and the discussion on how to monitor and eliminate AI bias in financial services on p68 is particularly interesting.

When asked recently if AI was a threat to humanity, ChatGPT replied: “It is up to us, as the creators and users of AI, to ensure that it is used in a responsible and ethical manner.” There was a deal too much species confusion in that sentence for me. Regulators need to get a grip. Our last issue’s spine tingler, “How many people had that kind of crazy dream and yet lived to see it come to fruition?”, was by Dee Hock, founder of Visa (1929-2022). Sue Scott, Editor

21 Credit where it’s due Zopa Bank’s Chief Strategy Officer

Merve Ferrero explains what a responsible BNPL product looks like

24 Glittering success

We ask Jason Cozens, CEO of Glint, what’s next for gold-backed challengers?

Open Banking

28 Layer cake

Open banking hasn’t disintermediated legacy providers to the extent they feared – not yet. As more players build layers of services on top of the data banks hold, Brian Hanrahan, CEO of Nuapay, shares how they can ensure their slice of the action

30 Breadth

And

depth:

Open Banking At Opposite Ends Of The World

The UK’s NatWest and National Australia Bank recently compared and contrasted the two countries’ approach to open banking and came up with five recommendations for the next stage of their respective journeys. Here, the report’s authors, Clare Melling and Brad Carr, look at what the future could hold

34 Open to change

PSD2 hasn’t unlocked quite as many doors in Europe as its architects hoped. But Nikolaj Hartvig from Neonomics and Tom Wijnen from Worldline – the first ‘pan-European pure PSD2 API providers’ – are optimistic it can still fulfil its potential

REGULATION & TRUST

40 Heroes and villains: the UK’s fincrime debate

Eddie Vaughan from LexisNexis Risk Solutions, Jim Winters from Nationwide Building Society and David Callington from HSBC ask if it’s time for a new approach to fighting economic crime

58 52

44 Kill or cure?

Is Secure Customer Authentication just a sticking plaster for a patient that’s bleeding out? Linda Weston, MD and Head of Core Products for Barclaycard Payments, Andrew Shikiar, Executive Director of the FIDO Alliance, and Quintin Stephen, Director of Global Strategy at Giesecke+Devrient discuss vital signs and possible interventions

Sustainability

52 Be the change you want to see

Is sustainability slipping down the banking agenda? Mobiquity’s Peter van de Venn urges banks to keep their eye on the prize – being a brand with a purpose

55 The heat is on ING’s Anne-Sophie Castelnau explains how the bank is tackling one of the biggest polluting sectors in its lending portfolio… and it’s not who you think

58 The activist bank

Short of turning off funding for fossil fuels tomorrow, Martin Richards from HSBC, Clinton Abbott of SunTec and Alex Garkov at EcoVadis explore how banks can effect positive change in the global economy

62 Calm before the storms

Traditional models underestimate the role of climate as a driver of past events. Jamie Rodney, CEO of Reask, explains why a new approach, using climate-aware AI, is needed

Artificial Intelligence

65 AI see the future

SmartStream CTO Roque Martinez reveals how the company’s significant investment in AI is taking it into new and surprising markets

68 Countering bias in financial AI

It’s become an indispensable technology in financial services, but how does the industry ensure it’s working to the benefit of everyone? We find out with ACI Worldwide, HSBC and Rabobank

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