Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Gary Gensler Speech to the National Press Club: “AI: The Most Transformative Technology of Our Time”
SEC Speech | Jul 18, 2023
In his speech before the National Press Club on July 17, Gary Gensler, the Chair of the Securities and Exchange Commission, discusses the transformative power of artificial intelligence (AI) and its implications for various sectors, particularly finance. He also raises concerns about the explainability and fairness of AI models, as well as the potential risks to financial stability posed by the dominance of a small number of AI platforms.
Select Quotes
"AI, though, is much broader. I believe it’s the most transformative technology of our time, on par with the internet and mass production of automobiles."
-
- Gensler discusses the significant impact of AI, comparing its transformative power to that of the internet and the mass production of automobiles. He highlights how AI has already been adopted in various sectors, including finance, where it's used for call centers, account openings, compliance programs, trading algorithms, sentiment analysis, and more.
- He also mentions the rapid changes AI has brought to the field of robo-advisers and brokerage apps, emphasizing the breadth and depth of AI's influence.
See: FCA’s Emerging Regulatory Strategy for Big Tech and Artificial Intelligence
"AI models’ decisions and outcomes often are unexplainable... AI also may make it more difficult to ensure for fairness. The outcomes of its predictive algorithms may be based on data reflecting historical biases as well as latent features that may inadvertently be proxies for protected characteristics."
-
- He raises concerns about the explainability and fairness of AI models. He points out that the complex, nonlinear, and dynamic nature of AI models can make their decisions difficult to interpret.
- He also warns about the potential for AI to perpetuate historical biases and discrimination, as AI models may use data reflecting these biases or use latent features that act as proxies for protected characteristics.
"The possibility of one or even a small number of AI platforms dominating raises issues with regard to financial stability... AI may heighten financial fragility as it could promote herding with individual actors making similar decisions because they are getting the same signal from a base model or data aggregator."
See: How Can We Improve Fighting Financial Crime With Artificial Intelligence?
-
- He suggests that this could lead to financial fragility due to herding behavior, where individual actors make similar decisions based on the same signals from a base model or data aggregator.
- He also mentions the potential for AI to exacerbate the inherent network interconnectedness of the global financial system, which could pose additional risks to financial stability.
Read the full speech --> here
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
|---|---|---|
 |  |  |
Leave a Reply