Jakarta, CNBC Indonesia – The use of artificial intelligence (AI) technology in the financial industry is increasingly widespread. However, the US stock trading and exchange regulator believes the market will collapse if market players depend on AI.

Chairman of the US Securities and Exchange Commission (SEC) Gary Gensler warned of the dangers of implementing AI, even assessing that this technology could trigger the next financial crisis.

To Financial Times, he expressed his belief that AI will cause an economic crisis. Therefore, market regulators must take steps to anticipate AI risks in the financial sector.

The factor that makes AI dangerous for the financial system is the way it is developed. Technology companies developing AI technology for the financial industry are not supervised by financial authorities.

If financial companies use AI models developed without regulatory oversight, decisions made when backed into a corner go untested. The result, was a disaster in the market.

“I think there will be a financial crisis, and only then will people say, oh yeah! [Penyebabnya] is a data aggregator or model, on which we depend. There can be changes in the market. Or one sector of the stock market,” Gensler said.

According to Futurism, Giant financial companies such as Morgan Stanley and Goldman Sachs are racing to use AI in their business processes.

Most applications of AI are to search for research reports and to craft talking points in preparation for meetings with clients. JPMorgan Chase has even developed a platform similar to ChatGPT that can be used by customers to choose investments.

The SEC in July proposed new regulations that would require brokers and advisors to disclose conflicts of interest when using “data analytics and predictions or similar technologies.”

According to Financial Times, The SEC is also drafting additional regulations for AI. On the other hand, regulators in Europe are taking firmer steps by drafting an AI Law.

[Gambas:Video CNBC]

(dem/dem)