What does the EU Act mean for AI?
What does the EU Act mean for AI?
What does the EU Act mean for AI?
12 oct 2023
Groundbreaking AI Act is in force, bringing significant changes for fintech companies that leverage AI technology. Here's a comprehensive overview of the Act's implications, tailored to your friendly reading preferences.
🗒 Navigating the Risk-Based Tiered System
The AI Act adopts a risk-based approach, categorizing AI systems into three tiers based on their potential impact: unrestrictive, limited, and high-risk. For which additional obligations apply, including mandatory fundamental rights impact assessments.
🗒 Foundation Models Get Regulated
Following the lead of President Biden's Executive Order, this act regulates foundation models, which are the most complex and powerful AI models, requiring 10^25 flops of computing power to train. Models crucial for fintech applications like natural language processing and fraud detection.
🗒 Prohibited AI Systems
Safeguarding fundamental rights, the AI Act prohibits six categories of AI systems:
• Biometric categorization using sensitive characteristics
• Untargeted facial recognition databases
• Emotion recognition in workplaces and educational institutions
• Social scoring based on social behavior or personal characteristics
• Manipulative AI systems
• AI exploiting vulnerabilities of individuals
🗒 Transparency and Accountability for High-Risk AI
High-risk AI systems must adhere to stringent transparency requirements, including clear explanations of their operation and decision-making processes. Additionally, providers must maintain thorough documentation to demonstrate compliance.
🗒 Bias Management and Human Oversight
High-risk AI systems must be designed and developed to effectively manage biases, ensuring non-discrimination and adherence to fundamental rights. Human oversight is also mandatory for these systems to minimize risks and ensure human discretion.
🗒 Potential Impacts on Fintech Companies
Companies using prohibited technologies may need to switch strategies. Increased transparency might affect IP protection, seeking a balance between disclosure and secrecy. Investing in better data and bias management tools could improve AI fairness at a higher cost. Documentation and record-keeping add administrative burden, impacting product launch. Integrating human oversight into high-risk AI requires system and staff adjustments.
🗒 Penalties for Non-Compliance
Non-compliance with the AI Act carries significant financial penalties, ranging from €35 million to €7.5 million, depending on the infringement and company size.
🗒 Legal Guidance is Essential
The AI Act's implications are far-reaching and complex, making it crucial for fintech companies to seek legal guidance to navigate this new regulatory landscape effectively.
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The original document can be found here:
https://thefuturesociety.org/wp-content/uploads/2023/12/EU-AI-Act-Compliance-Analysis.pdf
🗒 Navigating the Risk-Based Tiered System
The AI Act adopts a risk-based approach, categorizing AI systems into three tiers based on their potential impact: unrestrictive, limited, and high-risk. For which additional obligations apply, including mandatory fundamental rights impact assessments.
🗒 Foundation Models Get Regulated
Following the lead of President Biden's Executive Order, this act regulates foundation models, which are the most complex and powerful AI models, requiring 10^25 flops of computing power to train. Models crucial for fintech applications like natural language processing and fraud detection.
🗒 Prohibited AI Systems
Safeguarding fundamental rights, the AI Act prohibits six categories of AI systems:
• Biometric categorization using sensitive characteristics
• Untargeted facial recognition databases
• Emotion recognition in workplaces and educational institutions
• Social scoring based on social behavior or personal characteristics
• Manipulative AI systems
• AI exploiting vulnerabilities of individuals
🗒 Transparency and Accountability for High-Risk AI
High-risk AI systems must adhere to stringent transparency requirements, including clear explanations of their operation and decision-making processes. Additionally, providers must maintain thorough documentation to demonstrate compliance.
🗒 Bias Management and Human Oversight
High-risk AI systems must be designed and developed to effectively manage biases, ensuring non-discrimination and adherence to fundamental rights. Human oversight is also mandatory for these systems to minimize risks and ensure human discretion.
🗒 Potential Impacts on Fintech Companies
Companies using prohibited technologies may need to switch strategies. Increased transparency might affect IP protection, seeking a balance between disclosure and secrecy. Investing in better data and bias management tools could improve AI fairness at a higher cost. Documentation and record-keeping add administrative burden, impacting product launch. Integrating human oversight into high-risk AI requires system and staff adjustments.
🗒 Penalties for Non-Compliance
Non-compliance with the AI Act carries significant financial penalties, ranging from €35 million to €7.5 million, depending on the infringement and company size.
🗒 Legal Guidance is Essential
The AI Act's implications are far-reaching and complex, making it crucial for fintech companies to seek legal guidance to navigate this new regulatory landscape effectively.
Follow us on LinkedIn to stay up-to-date
The original document can be found here:
https://thefuturesociety.org/wp-content/uploads/2023/12/EU-AI-Act-Compliance-Analysis.pdf
🗒 Navigating the Risk-Based Tiered System
The AI Act adopts a risk-based approach, categorizing AI systems into three tiers based on their potential impact: unrestrictive, limited, and high-risk. For which additional obligations apply, including mandatory fundamental rights impact assessments.
🗒 Foundation Models Get Regulated
Following the lead of President Biden's Executive Order, this act regulates foundation models, which are the most complex and powerful AI models, requiring 10^25 flops of computing power to train. Models crucial for fintech applications like natural language processing and fraud detection.
🗒 Prohibited AI Systems
Safeguarding fundamental rights, the AI Act prohibits six categories of AI systems:
• Biometric categorization using sensitive characteristics
• Untargeted facial recognition databases
• Emotion recognition in workplaces and educational institutions
• Social scoring based on social behavior or personal characteristics
• Manipulative AI systems
• AI exploiting vulnerabilities of individuals
🗒 Transparency and Accountability for High-Risk AI
High-risk AI systems must adhere to stringent transparency requirements, including clear explanations of their operation and decision-making processes. Additionally, providers must maintain thorough documentation to demonstrate compliance.
🗒 Bias Management and Human Oversight
High-risk AI systems must be designed and developed to effectively manage biases, ensuring non-discrimination and adherence to fundamental rights. Human oversight is also mandatory for these systems to minimize risks and ensure human discretion.
🗒 Potential Impacts on Fintech Companies
Companies using prohibited technologies may need to switch strategies. Increased transparency might affect IP protection, seeking a balance between disclosure and secrecy. Investing in better data and bias management tools could improve AI fairness at a higher cost. Documentation and record-keeping add administrative burden, impacting product launch. Integrating human oversight into high-risk AI requires system and staff adjustments.
🗒 Penalties for Non-Compliance
Non-compliance with the AI Act carries significant financial penalties, ranging from €35 million to €7.5 million, depending on the infringement and company size.
🗒 Legal Guidance is Essential
The AI Act's implications are far-reaching and complex, making it crucial for fintech companies to seek legal guidance to navigate this new regulatory landscape effectively.
Follow us on LinkedIn to stay up-to-date
The original document can be found here:
https://thefuturesociety.org/wp-content/uploads/2023/12/EU-AI-Act-Compliance-Analysis.pdf
AI in fintech: Navigating obligations and limitations: Highlights the impact on high-risk AI used in fintech.
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