Christopher Waller, a member of the Federal Reserve Board, stated that the Fed is having regular meetings with banks it regulates on managing risks related to artificial intelligence.
Speaking at an event titled "The Future of Cryptocurrency and Global Finance" in Florida, Waller warned that while artificial intelligence can bring new efficiencies to banking processes, it also poses new risks.
Waller pointed out that more and more financial institutions are using AI for customer service applications, fraud monitoring, and insurance activities, and said that the Fed is having regular discussions with banks it regulates on managing AI-related risks.
He also mentioned that "smart contracts" which depend on pre-programmed inputs offer promise in modernizing bank transaction agreements, but warned that smart contracts also pose risks such as cybersecurity vulnerabilities and errors.