The European Commission (the “Commission”) launched a proposal for a regulation laying down the rules and regulations on the use of Artificial Intelligence (“AI”). With this proposal, the Commission aims to ensure the safety of such usage and the respect to each individuals’ fundamental rights. This regulation shall be applicable to service providers and users alike, and irrespective of their location as long as they affect natural persons located within the European Union.
The proposed AI regulatory framework makes use of a risk-based approach to classify AI systems, mainly within:
- Unacceptable risk;
- High risk; or
- Low or minimal risk.
Different requirements will be applicable to the different classifications. For example, AI systems posing unacceptable risks shall be prohibited. Furthermore, in the context of this proposal, the evaluation of credit worthiness or establishing a credit score by AI systems is listed as a high-risk activity, which will have a direct impact on banks which are currently or planning to make use of such system.
Although this regulation is still at its initial stages, banks and other institutions are encouraged to be proactive and identify their use of AI systems in order to start planning ahead to be in compliance with the proposed requirements.
Feel free to contact us should you require any further information on the above.