Fintech Professional Shares Perspective on EU Artificial Intelligence Act and UK’s AI Legislation

With the UK rethinking its approach to AI legislation, Scott Dawson, Head of Strategic Partnerships at DECTA, an end-to-end payments solutions provider, has shared insights focused on examining what a divergence in the UK and the EU’s legislative approach in AI could mean.

Scott Dawson, Head of Sales and Strategic Partnerships at DECTA, who previously served as Commercial Director at Neopay, says:

“Ideally, the role of regulation should be to facilitate innovation, and the EU’s AI Act is a good example of regulation that has the potential to do just that. Classifying AI systems based on risk will allow fintech companies to benefit from the new capabilities of the technology while keeping a regulatory eye on the ‘black box’ problem. As AI models become more complex and opaque, their workings and reasoning are ever more difficult for any one human to understand. The act emphasises the need for transparent AI, ensuring companies can explain how algorithms arrive at decisions. Naturally, there are considerations presented by this approach, but by creating a conceptual structure for firms to innovate within, the EU is creating a regulatory framework we can pre-emptively manage.”

He adds:

“While the UK hasn’t enacted similar legislation, its “wait and see” approach poses challenges. Especially because fintech firms aiming for the EU market will need to comply with the Act’s requirements. This includes increased transparency and robust due diligence for AI used in areas like credit scoring. Once again, an area where we need to understand why machines make the decisions that they do – and we’re not there yet.”

Dawson, a professional with over 20 years of experience within the payments industry, concludes:

“During the UK’s AI Safety Summit in Bletchley Park last year, Rishi Sunak suggested the UK should be a leader in this space. However, it will need to make more decisive moves than just waiting and seeing if that is to be the case. If it does take the reins, regulating for the sake of innovation is very much an option. While the UK hasn’t adopted its own AI legislation, the EU Act’s influence is undeniable. UK’s fintech sector must adapt to the new standards to ensure continued access to the EU market and foster trust in AI-driven financial services.”

For many people, AI is more of a buzzword and something they do not fully grasp at this point, primarily due to its highly technical nature. Although AI algorithms and applications have been around for several decades, these innovations have only recently matured to the point where they can make a considerable impact on consumer and business applications.

Despite tremendous growth in the past few years, AI still has a long way to go before the underlying tech improves to the point where it may be effectively applied to a wider range of scenarios/use cases. At present, individual consumers and business organizations should focus on learning about the potential benefits of harnessing the tech behind AI while also considering the various risks involved with AI-enabled services.

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