EU Legislation on AI in Banking: A Framework for Safe and Secure Integration

The article discusses the EU legislation on AI in banking, emphasizing the need for a technology-specific regulatory framework to address the risks associated with AI integration in high-risk sectors like banking. It highlights the significant impact of AI on the banking industry, with over 200-300 billion dollars in potential value annually across the global banking sector. The article outlines the challenges posed by AI, including the opacity of black box algorithms, potential for biases and discriminatory outcomes, and the threat of AI-driven cyber attacks. It emphasizes the need for regulatory measures to ensure the safe and secure use of AI in banking operations, including mandatory requirements for transparency, compliance assessment, and human oversight. The article also suggests the need for a specific oversight mechanism in India to address the impact of AI on the Indian banking system.