Cautious AI Adoption Urged for Financial Advisers, Says FMA

The Financial Markets Authority (FMA) has urged financial advisers to approach artificial intelligence (AI) adoption cautiously. In its report, "Understanding Artificial Intelligence in Financial Services," the FMA highlights AI's potential benefits in enhancing customer service and operational efficiency. However, it warns of risks such as data breaches, algorithmic bias, and cybersecurity threats.

The report stresses the importance of robust governance frameworks and risk management to ensure responsible AI usage. Financial advisers are encouraged to adopt transparent and unbiased AI-driven decisions, aligning with regulatory standards. The FMA emphasizes the need for adequate training for advisers, ensuring clients understand AI's role in their financial management. To further discuss best practices, the FMA will host a roundtable on AI in financial services later this year.

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