European financial firms find themselves lagging behind in the adoption of artificial intelligence (AI), while U.S. lawmakers are taking steps to enhance AI oversight in various sectors. A new House resolution specifically targets AI in finance, and California's healthcare AI law is drawing congressional attention as a potential national model. This flurry of activity comes as EY reports that only 9% of European financial institutions consider themselves AI leaders, despite 72% planning to increase their AI investments in the face of regulatory uncertainty.AI Oversight in Finance: A Critical Role
U.S. Reps. Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.) have introduced a House resolution calling for tighter oversight of AI in banking and housing. This bipartisan measure tasks the House Financial Services Committee with monitoring how AI is transforming various aspects of the financial industry, from mortgage approvals to stock trading. As the resolution states, "Given the critical role of the financial and housing markets, the Committee on Financial Services should play a leading role in overseeing the adoption of artificial intelligence."While acknowledging the benefits of AI in fraud prevention and customer service, the resolution also highlights several concerns. These include potential bias in lending decisions, cybersecurity risks, and the challenge faced by smaller community banks in keeping up with AI technology. The measure directs regulators to enforce anti-discrimination laws and assess oversight gaps as AI use expands. It also emphasizes protecting consumer data privacy and studying AI's impact on financial sector jobs while promoting continued U.S. leadership in responsible AI development.
Congress Eyes California's Law: A Potential Model
U.S. House lawmakers are closely examining California's new approach to regulating AI in healthcare as a potential model for federal legislation. Effective from January, California law requires insurers to oversee prior authorization requests processed using AI. This legislation, backed by the American Medical Association, emerges as insurers like United Healthcare and Cigna face class action lawsuits over alleged improper AI-driven care denials.Rep. Ami Bera (D-Calif.), a member of the House Task Force on AI, told Politico that they will assess the law's effectiveness before considering national adoption. "We will probably approach it by seeing the impact of the law," Bera said. "Does it streamline lower costs? Does it not hinder lower costs? If it does all of those things, it could be a model nationwide."In October, the AMA's House of Delegates adopted a similar policy requiring physician review of AI-recommended care denials. The congressional task force plans to release AI regulation recommendations later this month, potentially including a proposal to elevate the group to select committee status.California's AI healthcare law, authored by state Sen. Josh Becker of San Francisco's southern suburbs, requires insurers to oversee AI-driven prior authorization decisions. This legislation addresses the growing concerns about automated insurance denials as major insurers face class action lawsuits over alleged improper AI use in coverage decisions.
European Finance Lags in AI: A Wake-Up Call
A new EY survey reveals that only 9% of European financial services firms consider themselves ahead in AI adoption, with most still in the early implementation stages. The study, released on December 2 and covering firms with a market cap of €880 billion, shows that 90% have adopted AI to some degree."GenAI is developing faster than many other technological innovations of recent times, and demands new, progressive skill sets," said Omar Ali, EY Global Financial Services Leader, in a news release. "The firms that ramp up regulatory preparations, build an appropriate risk and control framework, and roll out essential new training and upskilling programs across their whole workforce — not just to the technical few — will be setting themselves apart from the competition."The survey finds that 72% of executives plan to increase GenAI investment in the coming months. However, only 11% feel prepared for incoming regulations, and 15% lack an AI regulatory risk framework.While 78% of leaders acknowledge that their workforce lacks strong AI capabilities, only 25% have established training programs. Sixty-six percent of executives believe that AI could affect up to a quarter of current finance roles within a year.For entry-level positions, 59% of leaders expect significant changes, yet only 24% plan to restructure these roles, and 35% have taken no action to address AI's impact on junior staff.
