AI Can Lead to Financial Instability, Low Trust in Banks: BoE Analyst

AI bias can result in decisions to offer exploitative interest rates to ethnic minorities and smaller lines of credit to women.

Screens displaying the logos of OpenAI and ChatGPT are pictured in in Toulouse, France, on Jan. 23, 2023. LIONEL BONAVENTURE/AFP via Getty Images

Artificial intelligences poses a risk to financial stability and the trust in banks, a Bank of England (BoE) analyst has warned.

AI models are increasingly used across various industries to optimise operations. Banking is no exception. However, biased data or unethical algorithms used in AI could exacerbate financial stability risks, according a blog by the BoE staff.