The China Banking and Insurance Regulatory Commission published remarks delivered at the Global Wealth Management Forum setting out preliminary views on how artificial intelligence is being applied in finance and how it could change financial products, industry structure and regulatory practice. The speech argues that AI could materially reduce the cost of developing and delivering financial products, making it more economical to serve niche demand and extend reach to remote customers, and potentially changing how financial services are embedded into user “scenarios”. It also highlights a risk of greater concentration as large technology firms and large financial institutions leverage advantages in data, algorithms, capital and talent, potentially creating competitive barriers for small and mid-sized firms and challenging the diversity of financial intermediaries. For firm-level competitiveness, it points to the need to turn “usable data” into “trustworthy data”, to apply a “choice neutrality” principle when selecting data and models, and, in insurance, to use AI to improve actuarial assumptions and reduce deviations between assumptions and outcomes. On supervision, the remarks reference ongoing international monitoring of AI by bodies such as the Financial Stability Board, the Basel Committee on Banking Supervision and the International Association of Insurance Supervisors, and frame the supervisory approach as encouraging technology adoption to improve service and efficiency while strengthening risk management and maintaining balance between concentration and dispersion, differentiation and homogeneity, and safety and efficiency. The regulator also signals that supervisors should invest in resources, methods and processes to enhance supervisory technology capabilities, noting that AI use cases are still evolving and that definitive conclusions are premature.

Original source View in tracker