The European Central Bank (ECB) is experimenting with how to automate mundane tasks using off-the-shelf artificial intelligence (AI) products. Its “infinity team” is exploring how generate text, images, and computer software before considering its use in critical banking operations.
The ECB’s chief services officer, Myriam Moufakkir, has launched an initiative to harness AI for a narrow set of use cases. These include briefing drafts, summarizing meetings, creating code for software, tweaking language in official communications, and writing code.
Central Bankers Worry About Opacity of AI
Moufakkir emphasized the bank’s cautious approach amid legal and transparency risks. Humans cannot always understand how AI arrives at its answers, making accountability for a harmful answer difficult to assess.
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Last week, US Federal Reserve governor Lisa Cook said AI without transparency surrounding its decision-making is of little value. A recent analysis suggests that when we poorly define the purpose of AI in banking, its benefits become less clear.
The ECB joins the Federal Reserve, the Bank of England, and the Monetary Authority of Singapore in exploring AI. Concurrently, the Fed is running its FedNow system for instant settlements, which many believe foreshadows a central bank digital currency (CBDC), while the Bank of England plans to introduce its own system for quick interbank settlements.
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Banked Populations May Be Worried
It remains to be seen whether citizens will warm to the increasing scrutiny introduced by AI. Citizens in many countries have balked at the idea of a CBDC for its potential to access sensitive transaction data.
That concern, coupled with the use of AI, which has historically been unkind to minority populations, may be a pill many in the banked world would not be willing to swallow. The opacity of algorithms with access to unparalleled data could reinforce systemic biases on a worldwide scale.
But Europe is arguably the best positioned to explore this uncharted territory. Its citizens have opposed its digital euro idea as a solution in search of a problem, but the region’s combination of data privacy and AI rules may position it to lead central banks into the next era.
In 2018, the European Union passed its General Data Protection Rules legislation, which contained guidelines to safeguard user data in artificial intelligence models. Also, Europe’s Artificial Intelligence Act, which could be finalized later this year, will give institutions further guidelines on the ethical handling of user data.
The region has also pioneered rules for digital assets through its Markets in Crypto-Assets bill, which will become effective next year.
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