Legal Consideration on the Use of Artificial Intelligence Technology and Self-regulation in Financial Sector: Focused on Robo-Advisors

Keun Young Lee, Hun-Yeong Kwon, Jong In Lim

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

Artificial Intelligence (AI) technology is being used throughout the industry due to the introduction of the era of the Fourth Industrial Revolution. In the financial industry, AI technology is used in sales and marketing, fraud and illegality prevention, credit evaluation and screening, chat-bot and etc. The robo-advisor can apply the AI technology in case of investment advisory to provide a large and cost-effective portfolio of investment information. It also has positive function to the field in the fact that it has ability to generate popular investors and create new customers and services. However, robo-advisor that uses AI is still at its initial stage in introducing the technology and there are currently legal, institutional and policy limitations in providing comprehensive and customized advisory services. Thus, at first, this paper will consider the area of legal argument on the issues related to AI on the legal status and liability, financial IT, security and privacy. And focused on robo-advisor, the main issues concerning the current legal system and security self-regulatory method are elucidated and analyzed to provide the basic direction of regulation for development of utilization of AI technology in financial sector. In an environment that is shifting from ex-ante regulation to ex-post regulation, which is a current paradigm of financial IT security regulation, in order to modernize the regulations for the digital age, we propose specific measures to strengthen the use of regulatory sandbox as an autonomous regulatory scheme for the use of new technologies such as AI.

Original languageEnglish
Title of host publicationInformation Security Applications - 18th International Conference, WISA 2017, Revised Selected Papers
EditorsBrent ByungHoon Kang, Taesoo Kim
PublisherSpringer Verlag
Pages323-335
Number of pages13
ISBN (Print)9783319935621
DOIs
Publication statusPublished - 2018 Jan 1
Event18th World International Conference on Information Security and Application, WISA 2017 - Jeju Island, Korea, Republic of
Duration: 2017 Aug 242017 Aug 26

Publication series

NameLecture Notes in Computer Science (including subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics)
Volume10763 LNCS
ISSN (Print)0302-9743
ISSN (Electronic)1611-3349

Other

Other18th World International Conference on Information Security and Application, WISA 2017
CountryKorea, Republic of
CityJeju Island
Period17/8/2417/8/26

Keywords

  • Artificial Intelligence
  • Deep learning
  • Information security
  • Personal information protection
  • Privacy
  • Robo-advisors
  • Self-regulation

ASJC Scopus subject areas

  • Theoretical Computer Science
  • Computer Science(all)

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