The EU watchdog urged banks to prioritize the use of AI for their customers

The European Securities and Markets Authority (ESMA) has said banks and investment firms must have an “unwavering commitment” to the use of artificial intelligence (AI) in the best interest of clients.

On May 30, ESMA issued a public statement detailing ways in which financial services firms in the EU can use AI in their operations.

The statement emphasizes the use of AI in relation to the EU's Markets in Financial Instruments Directive, the MiFID Securities Act, and says such institutions will be fully legally responsible for protecting consumers.

ESMA said that while AI has the potential to “transform” retail investment services in terms of efficiency and innovation, the impact on the behavior of financial institutions and the protection of retail investors is “potentially significant”.

“Importantly, companies' decisions remain the responsibility of management, whether those decisions are made by humans or AI-based tools.”

When AI is employed in investment services, these firms are required to have an “unwavering commitment” to doing something that benefits their clients, regardless of the AI ​​tools used.

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This applies to AI tools that are specially developed or adopted by the financial institutions themselves but choose to use third-party AI services. This includes generative AI chatbots such as OpenAI's ChatGPT and Google's Gemini.

Earlier this year, regulators in the European Union approved the first comprehensive set of AI rules to apply across the 27-member-state group. This latest statement is separate from EU AI legislation and is only aligned with compliance with MiFID.

In addition to the AI ​​regulation, the EU is also working on other AI-related issues, such as the May 24 agreement from the EU Council on the use of supercomputers to boost the region's AI ecosystem and support startups.

On May 27, the European Blockchain Observatory and Forum (EUBOF) released a report highlighting the potential between blockchain and AI integrations, particularly in “healthcare and finance, where data security is critical” sectors.

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