EU regulator calls on banks to give priority to customers in the use of AI technology

The European Securities and Markets Authority (ESMA) has emphasized the importance of banks and investment firms prioritizing their clients’ best interests when utilizing artificial intelligence (AI) technologies. In a public statement released on May 30, ESMA outlined the guidelines for financial services companies in the European Union (EU) on the use of AI in their operations. The statement specifically focuses on the application of AI in accordance with the EU’s Markets in Financial Instruments Directive (MiFID) securities law, stating that these institutions hold full legal responsibility for consumer protection. While acknowledging that AI has the potential to revolutionize retail investment services by enhancing efficiency and innovation, ESMA also recognizes its significant impact on the behavior of financial institutions and the protection of retail investors. Consequently, the statement emphasizes the need for these firms to demonstrate an unwavering commitment to acting in the best interests of their clients, regardless of the specific AI tools employed. This commitment applies to both internally developed AI technologies and third-party AI services, including generative AI chatbots like OpenAI’s ChatGPT and Google’s Gemini. It is important to note that this statement is separate from the EU AI Act, as its primary focus is on ensuring compliance with MiFID regulations. In addition to AI regulations, the EU has actively addressed other AI-related issues. For instance, the EU Council reached an agreement on May 24 to utilize supercomputers in supporting the region’s AI ecosystem and promoting startups. Furthermore, on May 27, the European Blockchain Observatory and Forum (EUBOF) released a report identifying the potential for blockchain and AI integration to drive local innovation, particularly in industries such as healthcare and finance, where data security is crucial.