In the financial services industry, the application of machine learning (ML) methods has the potential to improve outcomes for both businesses and consumers. In recent years, improved software and hardware as well as increasing volumes of data have accelerated the pace of ML development. The UK financial sector is beginning to take advantage of this. The promise of ML is to make financial services and markets more efficient, accessible and tailored to consumer needs. At the same time, existing risks may be amplified if governance and controls do not keep pace with technological developments. More broadly, ML also raises profound questions around the use of data, complexity of techniques and the automation of processes, systems and decision-making. The Bank of England (BoE) and Financial Conduct Authority (FCA) have a keen interest in the way that ML is being deployed by financial institutions. That is why we conducted a joint survey in 2019 to better understand the current use of ML in UK financial services. The survey was sent to almost 300 firms, including banks, credit brokers, e-money institutions, financial market infrastructure firms, investment managers, insurers, non-bank lenders and principal trading firms, with a total of 106 responses received. The survey asked about the nature of deployment of ML, the business areas where it is used and the maturity of applications. It also collected information on the technical characteristics of specific ML use cases. Those included how the models were tested and validated, the safeguards built into the software, the types of data and methods used, as well as considerations around benefits, risks, complexity and governance. Although the survey findings cannot be considered to be statistically representative of the entire UK financial system, they do provide interesting insights. The key findings of our survey are: Machine learning in UK financial services
Financial service firms in the UK have requested further guidance on how to interpret government regulation with regard to the use of machine learning , according to a survey conducted during 2019 by the Financial Services Authority ( FCA ) and Bank of England ( BoE ) . Firms do n't see regulation , however , as something holding back the use of machine learning . Additionally , companies believe machine learning usage does n't create additional business risks , though it does amplify those risks . The FCA and BoE have announced plans to form a public - private group to explore some of the questions uncovered by the survey .