Opening remarks at the launch of the Artificial Intelligence Public Private Forum
Speech given by
Dave Ramsden, Deputy Governor for Markets & Banking
Launch of the Bank of England and the Financial Conduct Authority's Artificial Intelligence
Public Private Forum
12 October 2020
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All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice
Over the past few years, we've seen a huge expansion in the use digital technologies across society and
whether we're shopping online or listening
across the economy. And this has affected all of us in some way,
to music, streaming a film or engaging with friends and colleagues on social-media platforms, our lives have
been transformed by remarkable innovation and technological advances. And Artificial Intelligence is
increasingly at the heart of those innovative technologies.
Artificial Intelligence and Machine Learning are growing very rapidly in complexity, sophistication, and
importance for society, the economy as a whole, and financial services in particular.
AI is already embedded in many of the things we use every day, from mobile phones and tablets, to online
shopping platforms. It forms the core of many of the technologies that are becoming increasingly familiar,
such as biometric devices or autonomous vehicles. And this is likely to accelerate as smaller and smarter
devices become more widely used and embedded in homes and workplaces, in retail and consumer
products, across the so-called Internet-of-Things and as the global context changes rapidly due to the
COVID crisis.
And those same AI systems and processes are being used today across the financial sector to bring benefits
to consumers, to firms, and to the UK financial system as a whole. AI-driven online platforms may, for
example, help customers manage their money and savings more effectively, as well as make the processing
of loan applications or insurance claims easier, quicker, and more transparent. Financial firms may, in turn,
benefit from AI in making efficiency and productivity gains, in tailoring products to customers' needs, and in
more effective ways of combating financial crime. AI may also boost the overall efficient functioning and
resilience of financial markets and the wider economy.
Clearly, the world is a very different place today from the one we started this year with; and while the
COVID crisis has had, and will continue to have, a profound impact on the economy, and on the households
and businesses that drive it, it has also increased and focussed interest in the potential uses of AI in tackling
some of the many immediate problems and challenges precipitated by the crisis. For example, many
businesses, including financial firms, are looking to use AI, sometimes combined with alternative data
sources, for enhancing customer engagement, for driving more automation of internal processes, and for
improving virtual working environments.
In a recent survey of the banks and insurers we regulate, conducted as part of our ongoing monitoring of the
by the Bank's Fintech Hub along with colleagues from the PRA,
impact of COVID-19 around 45% of those
firms that participated reported that the crisis has led to an increase in the importance of AI and data science
applications for their future operations, with around 55% reporting no change, and none noting a decrease.
The survey also looked at changes in firms' investment
plans and resource commitments for AI projects as
well as areas where the crisis has had an impact on existing applications across different business lines.
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All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice
While the use of AI has clear benefits in an increasingly data-driven economy, there are risks and
challenges. And the impact of those benefits and risks will be felt at different paces and different depths at
technological, social, corporate, and systemic levels. It's useful to think of the risks and challenges in a
hierarchical way, starting with those that may become apparent at the data level and building up to the level
of models trained on those data; then, widening to the level of the firm, and finally, up to the level of the
financial system as a whole. Overlaying this are the regulatory and legal challenges presented by AI.
Taking these in turn, data form the core of all AI models and good data management and data governance
are essential in controlling issues with, for example, biases that may be embedded in the data. At the model
level, we need to think about issues such as ensuring that models continue to perform under a wide range of
different conditions and being able to explain the outputs of complex AI systems. Moving to the firm level,
some of the key issues will revolve around risk management and governance structures; around
accountability and appropriate controls. And finally, for the financial system as a whole, AI may amplify
network effects such as unexpected changes in the scale and direction of market moves.
challenges, it's clear that policy thinking in this arena is also evolving rapidly.
In terms of the regulatory
But the existing regulatory landscape is somewhat fragmented when it comes to AI, with different pieces of
regulation applying to different aspects of the AI pipeline, from data through model risk to governance. Policy
must strike a balance between high-level principles and a more rules-based approach. We also need to
future-proof our policy initiatives in a fast-changing field.
With all that in mind, and in order to further our objective of promoting the safe adoption of AI in financial
services, the Bank of England, along with the Financial Conduct Authority, is today launching the Artificial
Intelligence Public-Private Forum. [Plans to set up this Forum were announced by the Bank in June 2019 as
part of our response to the Future of Finance report.]
The purpose of the Forum is to further dialogue between the public and private sectors in order to better
understand the use and impact of AI in financial services. The Forum, which is expected to run for one year,
will consist of a series of quarterly meetings and workshops structured around each of three topic areas:
Data, Model Risk Management, and Governance.
In terms of membership, the Forum will draw on the knowledge and experience of 21 leading AI experts from
across the financial and technology sectors as well as academia; the Forum also has observers from the
Information Commissioner's Office and the Centre for Data Ethics and Innovation and more may be
invited.
The goal is to ensure that the Forum's design reflects a wide variety of views. The full list of members can be
found on our website.
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All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice
The specific aims of the Forum are: firstly, to share information and understand the practical challenges of
using AI in financial services, identify existing or potential barriers to deployment, and consider any potential
risks or trade-offs; secondly, to gather views on areas where principles, guidance, or regulation could support
safe adoption of these technologies; and finally, to consider whether once the forum has completed its
work ongoing industry input could be useful and if so, what form this could take.
Those aims underline the fact that AI is a deep and multi-faceted field requiring a coordinated and
The knowledge, experience, and expertise of the Forum's members
collaborative approach from regulators.
and observers will be invaluable in helping us to contextualise and frame the Bank's thinking on AI, its
benefits, its risk and challenges, and any possible future policy initiatives.
The AI Public-Private Forum is committed to being transparent and will publish summary reports of all Forum
and workshop discussions. It will also aim to deliver a final report of its findings and conclusions. However,
the outputs of the Forum should not be considered as an indication of future policy by the Bank or the FCA.
By being as open and transparent in our approach as possible, and by sharing the information of the Forum
publically with all its stakeholders, including other regulators, we hope to further the collective dialogue on
how best to support safe adoption of AI in financial services.
Finally, I would like to welcome the members of the Forum and its observers, and thank them in advance for
committing to and participating in this exciting and important project.
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All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice