Tag

ArtificialIntelligence

AI in Banking
AI in the Banking Sector – a Sword, a Shield or an Achilles’ Heel? Banking & FinanceFinTech

AI in the Banking Sector – a Sword, a Shield or an Achilles’ Heel?

1. Introduction We are not only living in a digital age but also in an age where individuals and businesses increasingly depend on banks for their day-to-day activities. The convergence of these two factors is compounded with the increased use of artificial intelligence (AI) both generally and specifically in the banking sector. From a general perspective, AI start-ups in 2013 received USD 2 bn in investments globally which increased twelvefold in 2018 to USD 24 bn . The European Commission is also planning to invest a total of €112 mm in AI, quantum research and innovation . More specifically, recent…
Matthew Muscat
8th November 2024
AI Act’s Impact on Businesses Operating Within the EU
The AI Act’s Impact on Businesses Operating Within the EU Telecoms, Media & Technology

The AI Act’s Impact on Businesses Operating Within the EU

This article is part of our EU AI Act series which explores the effect of the AI Act across various industries and sectors. Introduction The first article (see link below) in this EU AI Act series provided, inter alia, a breakdown of the scope, applicability, timeline and risk levels of the AI Act, Regulation (EU) 2024/1689 (hereinafter referred to as the “Act”). The Act introduces significant obligations for all businesses developing or deploying AI that affect persons in the EU, with major fines for non-compliance. Crucially, the Act is extraterritorial in nature, since it also applies to businesses established in…
Andrea Theuma, Tessa Borg Bartolo and Sofia Said Salomone
17th October 2024
The EU AI Act
The EU AI Act: A General Overview Telecoms, Media & Technology

The EU AI Act: A General Overview

This article is part of our EU AI Act series which explores the effect of the AI Act across various industries and sectors.  Overview & Applicability Timeline The Artificial Intelligence Act (“AI Act” or “Regulation”), officially Regulation (EU) 2024/1689, is a groundbreaking legislative framework designed to address the benefits and risks of AI technologies. Since AI is becoming ubiquitously integrated into various industries, the AI Act aims to ensure that these technologies are deployed safely, ethically, and transparently by establishing rules for AI Systems throughout the European Union (“EU”). The AI Act entered into force across the EU, including Malta,…
Claude Micallef Grimaud and Nicole Bonett
30th September 2024
AI & Funds #6 –
Conflicts of Interest Investment Services & Funds

AI & Funds #6 –
Conflicts of Interest

The purpose of disclosing conflicts of interest in the investment services industry is to ensure maximum transparency for the investor. A common conflict of interest is the situation when the fund’s investment manager owns voting shares in the fund and appoints a director who is already heavily involved in the investment manager’s structure. Consequently, the appointed director might be conflicted if one is required to take a decision against the investment manager. To mitigate this conflict of interest, the fund would apply its existent policy on conflicts of interest which would stipulate that the conflict be disclosed during board meetings…
Mario Mizzi
15th June 2023
AI systems are ultimately complex computer codes whose output reflects their input. If the inputted data contains human bias, the AI system tends to produce results which exacerbates existing biases. In this insight briefing, we analyse the effect that human bias in AI could have on EU investment funds.
AI & Funds #5 – Human Bias Investment Services & Funds

AI & Funds #5 – Human Bias

In an underground burial temple located within the EU’s southernmost State, one can find a primitive drawing of a spiralling never-ending red tree. Archaeologists opine that the millennia-old Saflieni Hypogeum’s ‘Tree of Life’ was painted to give meaning to death. There is no evidence that the Maltese prehistoric biosphere sustained red spiralling trees. If archaeologists did not inform us about this pictorial human bias, one might have assumed that never-ending trees did exist in Malta. Humans understand that trees are not never-ending and the red artefact is merely an imaginary depiction. On the other hand, Artificial Intelligence (“AI”) knows that…
Mario Mizzi
9th March 2023
The legal obligation to disclose information is a frequent occurrence in investment services laws. The draft framework for regulating artificial intelligence in the EU also puts vigorous emphasis on transparency. In this insight briefing, we compare the transparency obligations under the AIFMD with Article 52 of the draft EU AI Act to analyse the former’s adroitness for AI utilisation.
AI & Funds #4 – Transparency Obligations Investment Services & Funds

AI & Funds #4 – Transparency Obligations

In the ‘Proposal for a Regulation laying down harmonised rules on artificial intelligence’ (the “draft EU AI Act”), transparency is regulated by Article 13 and Article 52 thereof. The former applies to systems of Artificial Intelligence (“AI”) which are classified as high-risk and the latter applies to limited-risk AI systems. As explained in the previous briefing of this series of insights on AI and investment funds, the use of AI in investment services will generally fall under limited-risk AI systems. The reason being that high-risk AI systems as defined under the draft EU AI Act do not include AI systems…
Mario Mizzi
2nd March 2023