WASHINGTON–What should financial institutions be doing when it comes to recruiting AI talent and understanding artificial intelligence, and will AI be as much of a contributor to fraud as it is protection from the same?
Those questions were among many that were part of a discussion by expert witnesses during a Senate Banking Committee hearing this week on AI and the financial services industry.
While CUToday.info had extensive coverage of much of that discussion here, there was additional Q&A around the issues outlined above.
Testifying before the committee were:
- Melissa Koide, director and CEO, FinRegLab, former deputy assistant secretary for consumer policy, U.S. Department of the Treasury
- Daniel Gorfine, founder & CEO, Gattaca Horizons, LLC, adjunct professor of law, Georgetown University, and former chief innovation officer, Commodity Futures Trading Commission
- Professor Michael Wellman, University of Michigan, computer science & engineering.
The War for AI Talent
Noting that JP Morgan has hired 900 data scientists, 600 machine-learning engineers and 200 AI specialists, Sen. Mike Rounds (R-SD) wanted to know what steps need to be taken now to ensure the AI workforce of tomorrow.
“Technology literacy needs to be happening at the earliest stages,” responded Gorfine. “I'm a father of three daughters and I'm a huge believer whether you move into the tech field or not you need to at least understand the language, you need to understand what people are describing, because the reality is that technologies and machines are going to underpin all of the economic activity that takes place in our country and around the world. I encourage all senior leaders in government to make sure that you fully understand the language being spoken, and the same goes for business leaders in financial services. I think it's a risk if you don't know what technology underpins your operations.”
The Challenges in Some AI Models
Koide said she agreed with that analysis, but said what also must be recognized is the challenges being presented by some of the AI models being developed stem from the fact that there is human oversight of those models, “and we need diversity in different perspectives in the humans who were ultimately making the decisions about what data are we training the models on.”
To that end, she said it means looking in places where education is taking place, including historically Black colleges and universities, to ensure technology training and education is occurring.
Wellman, noting he is chair of the computer science department at Michigan, added “I’m proud that we're contributing quite a bit to the development of architect workforce. I think another strength that we've had in the United States is the ability to attract talent from around the world to come for advanced education and join our workforce.”
AI and Fraud
Separately, Sen. Bob Menendez (D-NJ), asked several questions related to fraud, including whether artificial intelligence could actually contribute to fraud, such as via synthetic identity fraud.
“FinRegLab has studied this deeply,” responded Koide. “I do think there are ways that we could be potentially leveraging the more complex analytics with comprehensive data to do a better job of catching fraud actors of different types. I would love to come back to you on the other side with potential research on whether consumers could see themselves becoming victims of increasingly sophisticated scams as a result of AI due to increasingly accurate deep fakes and more precise precisely targeted social engineering attacks.”
Gorfiine, noting in just the past week the NSA, FBI and CISA have published a report on deep fakes and scams, said that AI, just like any other
technology, can be used for fraud.
“But you can also leverage that technology for good. I think it's critical that financial institutions invest in AI-related technologies to detect fraud and scams,” he said. “It's also important for financial regulators to have the resources to be able to invest in that type of technology, as well from a surveillance perspective and a transaction-monitoring perspective. I also think collaboration between the public and private sector on this is really important.”
The New ‘Super-Impersonation’
Wellman told the committee he agreed AI has the potential to be a “very powerful” means of committing fraud, especially when it comes to misinformation, but said he also believes existing laws are in place that would punish such illegalities. But he also acknowledged there are complications.
His concern, he said, is an “arms race” between good guys and bad, anti-fraud solutions and those seeking to circumvent them.
“I think it needs a lot more study. There could be new kinds of fraud that are falling through the cracks of the existing legal or regulatory system,” he said, suggesting “loopholes” will no doubt be exploited in current law.
As an example, he said current laws and regulations never anticipated, for example, the kind of “super-impersonation” of people new technologies are making possible.
Are You a Human?
In another area of questioning during the hearing, Sen. John Kennedy (R-LA) asked the panel whether they believe when a consumer interacts with AI generated content the consumer has a right to know whether he or she is talking to a robot.
Responded Wellman, “Yes, I do. I think it’s a key area for new disclosures.”
When Kennedy asked the other panelists if they agreed, they said they did.
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