April 20 (Reuters) - The Federal Reserve has “regular
discussions” with the banks it supervises about managing the
risks associated with artificial intelligence, as more financial
institutions utilize AI for customer service applications, fraud
monitoring and underwriting, a top official at the U.S. central
bank said on Thursday.
In prepared remarks, Fed Governor Christopher Waller
cautioned that although AI could bring new efficiencies to bank
processes, it also involves novel risks, including difficulties
detecting problems or biases in large datasets.
Waller also said that so-called smart contracts –
or self-executing transactions on the blockchain whose results
depend on pre-programmed inputs — could hold “considerable
promise” to modernize transaction settlements. Still, he noted
that smart contracts also pose risks, such as cyber
vulnerabilities and bugs.
(Reporting by Ann Saphir and Hannah Lang; Editing by Andrea
Ricci)
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.