Artificial intelligence could lead to some consumers being priced out of the credit market, a joint report from the Financial Conduct Authority and the Bank of England has warned.
The report from the City watchdog and the central bank noted that AI “can lead to more tailored financial services and products” but said that it could also lead to some consumers being priced out of these products.
“Customers may also be unable to get credit or insurance cover if they are deemed to be higher risk,” the report said.
“Other risks to consumers include competition and fiduciary concerns, such as unfavourable and/or unfair penalties or product conditions (such as level of collateral needed).
“The combination of AI and personal data could also risk breaching consumers’ personal data rights.”
The report also warned that financial services firms could face challenges if they misuse AI.
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“For firms, inappropriate use of AI could result in financial loss (e.g. from a poor credit…
