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Gibraltar Finance Report
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systems’ inputs and operations are invisible to the user), AI itself can only carry out a limited number of functions and is restricted to learning from, and implementing, the historical data from which it has been taught. This means that AI technology lacks the logical reasoning of humans. As a result of this, utilising Artificial Intelligence within sensitive data systems such as healthcare and financial services has led to calls for regulation within the industry. A large responsibility for any modern day service provider is data protection - and there is no exception when it comes
to AI. Could regulating the
industry decrease the innovation of modern technologies that society has enjoyed to date? In February 2020, the European Commission published its whitepaper on Artificial Intelligence which outlined the EU’s approach to a regulatory framework, and found that only “high-risk” applications, such as healthcare, would be required to be under strict regulation,
providing lower risk applications with greater autonomy.
The answer to many of these data protection issues may not be found in regulation, but rather in blockchain technology. To some, the knowledge of the use of blockchain technology relates solely to cryptocurrency transactions, however, blockchain technology presents a range of innovative solutions to many GDPR
compliance issues. Blockchain is a structure that stores transactional records of the public in several databases, in a network connected through peer-to-peer nodes.
Blockchain and Distributed Ledger Technology (DLT) regulation itself, until recent years, has been stagnant. Luckily, the recent
surge of interest in cryptocurrencies has spurred regulatory efforts in countries all across the globe with regulators chomping at the bit to play their part. In the DLT space, companies are seeing regulation as more of a ‘need to have’, rather than a ‘nice to have’. The interest that regulatory bodies are showing in the industry is a significant and positive development, and it should act as a roadmap for how regulators interact with the private
sector when it comes to Artificial Intelligence. Regulatory bodies should be encouraged to work with the industry they are regulating, not against it. Experts in both blockchain and AI demonstrate immense innovative abilities, knowledge, and experience, which is invaluable when coming to the table with a regulator. The fact is that these technologies are not only not going away, they are likely to become increasingly prevalent in our daily lives, and as such, there is plenty that regulators can learn from industry experts that will better prepare our societies for the future.
Data protection systems It is a massive understatement to say that technological innovation has changed the way
in which we live our lives. Modern society already enjoys the benefits and efficiencies of AI daily, from changed shopping experiences to the ability to work from home, to massively enhanced production lines and highly efficient accounting processes. Society is unlikely to accept limitations on the existing technologies, making it difficult for governments to effectively legislate on such a fast growing and yet largely unregulated industry. There is much to be said for the data protection systems that have already been created and exist independently of AI, so it is up to forward thinking governments to take this into account while drafting legislation in consultation with industry experts. How we utilise existing technology will define the balance between regulation and future innovation. Needless to say, the future will look very different, yet very bright.
‘ It is a massive understatement to say that technological innovation has changed the way in which we live our lives
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10 Gibraltar International
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