BENGALURU: The injection and integration of artificial intelligence (AI) into digital spheres of interaction between institutions and the individual have been rapid and steep, allowing little time for law and policy to catch up. Bengaluru-based experts note finance as a sector that is increasingly moving towards AI-based automation, and with the absence of legal frameworks of accountability, consumers are left to their own devices as it were, making them prone to mishaps involving personal and confidential information.
While the loopholes of accountability that are inherent in an interaction between an individual and an AI platform involving private information are obvious, placing the onus on the individual to enact discretion, the situation gets further complicated when an agency offering financial advice uses AI in its operations. “Consumers do not need to fear every AI-driven financial platform, but they should approach them with informed scepticism. AI can assist with financial information, yet decisions involving savings, debt, insurance, retirement, or investments still require transparency, human accountability, and independent judgment,” said Prof. Madhu Veeraraghavan, pro vice-chancellor for Management, Law, Humanities, and Social Sciences at the Manipal Academy of Higher Education (MAHE).
If this was not all, a further complication is introduced by the fact that owing to the aforementioned lack of any ethical standard of procedure or similar framework, it is not uncommon for such platforms to run their customers’ queries through layers of AI, without expressly asking for consent. “If customers are not clear on how much algorithmic systems impact their decisions due to the lack of transparency, they could watch out for some signs: highly standardised replies with minimal context, minimal human interaction, instant automated responses, etcetera,” said Remya Tressa Jacob, an assistant professor in the Accounting, Economics and Finance Area department at T A Pai Management Institute (TAPMI).
The lack of a policy or governance with regards to AI also points out to the fact that it is by virtue elusive to such frameworks, which should be a cause for significant concern. Prof. Tuhin S Banerjee, associate dean of the School for Continuing Education and Professional Studies, RV University, explained, “The inherent lack of explainability in deep learning makes it difficult for financial institutions or regulators to understand the reason for the decision thus complicating compliance. Data misuse and unauthorised profiling may happen in trying to use AI for hyper-personalisation.”
