Podcast: SEC Commissioner Hester Peirce on regulatory demands, CCO input | Podcast | Compliance Week

HP:  …. Same with AI (artificial intelligence), where we run the risk of a similar problem. AI has been used in the financial industry for a long time, but there may be other uses, particularly uses that are customer facing. That’s going be the kind of thing where when clients are involved, when retail investors are involved, the SEC’s going to get more concerned. Rightly so. But we have to be careful not to say to firms you can’t experiment with using AI to serve investors because I think that could be a real game-changer, particularly for investors without a lot of money to invest—the idea that they can get advisers (who) can use AI to help serve that population.

AN: I can tell you that the compliance industry is very leery of AI tools generally, and they’re walking it very slowly. I think they would appreciate any guidance that regulators would give them, the SEC included.

HP: I understand the leeriness, too. I don’t know if that’s a word, but I understand why people are leery about that. The wariness is because you want to understand what the tool is doing. This is a great opportunity for us to sit down with people in the industry, with AI experts, and talk about what the challenges and opportunities are, rather than just rushing into rulemaking.

Source: Podcast: SEC Commissioner Hester Peirce on regulatory demands, CCO input | Podcast | Compliance Week