One of the key topics many lawmakers asked the hearing’s six witnesses about is how best to regulate AI without impeding on the technology.
“We should be leery of rushing legislation,” Committee Chair Patrick McHenry, R-N.C., warned in his opening statement. “It’s far better we get this right, rather than to be first.”
The witnesses consisted of AI experts from various companies, including John Zecca, executive vice president and global chief legal, risk and regulatory officer at NASDAQ.
When asked how AI could help foster increased accessibility to U.S. capital markets, Zecca told McHenry that there’s “the opportunity to develop products — whether it's ETF products, unique products — that could be available at lower costs to Main Street investors, and I think that's a true opportunity for them to diversify.”
“Similarly, I think you will see more of the analytics being used for investment advice, and again, targeting communities that have not been able to pay for individual, tailored financial advice,” Zecca added.
However, lawmakers also raised concerns about AI’s risks to financial services, including "deepfakes", which are manipulated images, videos or sounds produced by AI, often used to spread false information.
Rep. Blaine Luetkemeyer, R-Mo., said that a panelist at a national security illicit finance roundtable shared that his firm “has seen a 450% increase year over year in AI-powered deepfake attacks against financial institutions.”
“It begs the question: what do we do…to come up with regulations or provide oversight in a way that monitors this or controls this yet doesn’t stifle the markets?” Luetkemeyer added.
